All liabilities of the existing State of Andhra Pradesh in respect of any floating loan to provide short term finance to any local body, body corporate or other institution, shall be determined on the following basis, namely:––
         (a) if, the purposes of the floating loan are, on and from the appointed day, exclusive purposes of either of the successor States, then, of that State;
         (b) in any other case, it shall be divided on the basis of population ratio.