He also assured similar assistance to neighbouring Karnataka, which was reeling under the devastation caused by last week's floods in river Krishna, Tungabhadra and other rivulets.
The unprecedented rains and floods have claimed more than 270 lives in the two states and rendered 2.5 million people homeless apart from leading to the losses of billions of dollars in agriculture, road, power and other infrastructure sectors.
Dr Singh, who made an aerial visit of the flood hit areas of Krishna, Guntur, Nalgonda, Mehbubnagar and Kurnool, made the announcement at a press conference in Hyderabad after holding a review meeting with the Chief Minister K Rosaiah and other officials.
On Saturday, he will visit flood-affected districts of Karnataka. He described the devastation caused by the floods "as grave challenge of an unprecedented tragedy" and assured the people of the state that the central government was standing by them.
"People of Andhra Pradesh have my word the central government stands behind the state government."
He said the state government had given its assessment and feedback amount of losses the state had suffered due to the floods and set procedure will be followed by the central and the state governments to fix an amount and mobilize funds to help the state.
He said that after the state government submits a formal memorandum about the losses, the central government would send a team for the assessment and to discuss the matter with the state government.
"I have assured the Chief Minister and his cabinet colleagues that whatever is necessary to provide effective rescue, relief and rehabilitation, money will not be a constraint and the central government will stand behind this state government to provide all these resources to the state," he said.
When asked about the state government's request to declare the disaster as natural calamity, Dr Singh offered a diplomatic answer.
"It is a national calamity. Every such event if it affects so many people it is a Natural calamity. There is no particular merit in saying such and such thing is not a national calamity. In its own way it is a national calamity," he said.
On the BJP's government in Karnataka alleging that it was not getting sufficient funds from the Centre to deal with the floods, the prime minister said that it will be provided with full assistance.
Dr Singh, who after spending the night in Hyderabad will undertake an aerial survey of affected areas of Karnataka on Saturday, said, "I assure you that when it comes to human tragedy of this nature as long as I am the Prime Minster, we will not discriminate between one state or the other depending upon the political complexion of that government. That is not our approach and that will not be our approach."
He lauded the performance of the state government in dealing with the floods despite limited time at their disposal. It was an unprecedented challenge, as the state never had such a heavy rainfall, he added.
On river linking to prevent the floods, the prime minister said detailed project reports were prepared on two three water basins and they were being prepared for couple of more basins.
"But there will be environmental hazard and all such aspects will have to be considered," he said, agreeing that the process needed to be taken forward.
Earlier, Prime Minister Manmohan Singh, accompanied by the Chief Minister K Rosaiah and others, under took an aerial survey of the flood-affected areas of Krishna, Guntur, Mehbubnagar and Kurnool.
Soon after he landed at Gannavaram airport near Vijaywada in a special aircraft, he boarded the Indian Air Force helicopter to make the aerial survey of the region devastated by the worst floods in the state's history, rendering more than a million people homeless.
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