A Regional Standing Committee: 1. There will be one legislature for the whole of Andhra Pradesh which will be the sole law making body for the entire state and there be one Governor for the State aided and advised by the Council of Ministers responsible to the State Assembly for the entire field of Administration.

2. For the more convenient transaction of the business of Government with regard to some specified matters the Telangana area will be treated as one region.

3. For the Telangana region there will be a Regional Standing Committee of the state assembly consisting of the members of the State Assembly belonging to that region including the Ministers from that region but not including the Chief Minister.

4. Legislation relating to specified matters will be referred to the Regional committee. In respect of specified matters proposals may also be made by the Regional Committee to the State Government for legislation or with regard to the question of general policy not involving any financial commitments other than expenditure of a routine and incidental character.

5. The advice tendered by the Regional Committee will normally be accepted by the Government and the State Legislature. In case of difference of opinion, reference will be made to the Governor whose decision will be binding.

6. The Regional Committee will deal with following matters:

i) Development and economic planning within the framework of the general development plans formulated by the State Legislature. ii) Local Self Government, that is to say, the Constitutional powers of Municipal Corporations, Improvement Trusts, District Boards and district authorities for the purpose of Local Self Government or Village Administration. iii) Public health and sanitation, local hospitals and dispensaries. iv) Primary and secondary education. v)Regulation of admission to the educational institutions in the telangana region. vi)Prohibition vii) Sale of agricultural lands. viii) Cottage and small scale Industries, and ix) Agriculture, Cooperative Societies, Markets and Fairs.
Unless revised by agreement earlier this arrangement will be reviewed after ten years.

B. Domicile Rules : A temporary provision be made to ensure that for a period of five years, Telangana is regarded as a unit as far as recruitment to subordinate services is concerned; posts borne on the cadre of these services may be reserved for being filled up by persons who satisfy the domicile conditions as prescribed under the existing Hyderabad Mulki Rules. ( 12 years of Stay in Telangana area)

C. The position of Urdu. The Government of India would advise the state Government to take appropriate steps to ensure that the existing position of Urdu in administrative and judicial structure of the State is maintained for a period of five years.

D. Retrenchment of surplus personnel in the new State. The Government of India do not anticipate any retrenchment. the intention is that so far as possible, the service personnel from the Hyderabad State should be automatically integrated into the services of the Andhra Pradesh without any process of screening. Should, however, any retrenchmentbe found necessary, the entire personnel of the services of the enlarged State will be treated on equal footing.

E. Distribution of expenditure between Telangana and Andhra Regions. Allocation of expenditure with the resources of the state is a matter which falls within the purview of the State Government and the State Legislature.. Since , however, it has been agreed to the representatives of Andhra and Telangana that the expenditure of the new state on central and general administration should be borne proportionately by the two regions and the balance of income should be reserved for expenditure on the development of Telangana area, it is open to the state government to act in accordance with the terms of agreement in making budgetary allocations. The Government of India propose to invite the attention of the Chief Minister of Andhra to this particular understanding and to express the hope that it will be implemented.

F. The existing educational facilities including Technical Education in Telangana should be secured to the students of Telangana and further improved—

G. The cabinet will consist of members in proportion of 60:40 percent for Andhra and Telangana respectively, out of 40 % of Telangana ministers, one will be a Muslim from Telangana. If the Chief Minister is from one region the other region should be given Dy Chief Ministership.

Signatories

Andhra region
B. Gopal Reddy, Chief Minister, Andhra State
N. Sanjeeva Reddy
G.Lachanna
Alluri Satyanarayana Raju

Telangana Region
B. Rama Krishna Rao, Chief Minister, Hyderabad state
K.V. Ranga Reddy
M. Chenna Reddy
J.V. Narsing Rao

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