Budget 2024: Did the Centre Really Commit Rs 15,000 Crore to Andhra Pradesh’s Amaravati?

A war of words has already broken out between the ruling TDP and the opposition YSR Congress over the Centre’s ‘assurance’. The FM’s remarks made later in the press conference make it clear that it is not a grant per se. She said, ‘The 15,000 crore that we promised to them (Andhra Pradesh), we are getting it for them from the World Bank.’

New Delhi: Since Tuesday morning, when Union finance minister Nirmala Sitharaman presented the Union budget 2024-25, the news of Andhra Pradesh getting Rs 15,000 crore to build its capital in Amaravati has been widely reported by most media outlets as a “bonanza” and has also been readily shared by the N. Chandrababu Naidu government and the Telugu Desam Party (TDP).

But, as they say, the devil lies in the details. The wording of Sitharaman’s budget speech makes it clear that the Union government will only “facilitate special financial support through multilateral development agencies”.

“Our government has made concerted efforts to fulfil the commitments in the Andhra Pradesh Reorganisation Act. We are recognising the state’s need for capital. We will facilitate special financial support through multilateral development agencies. In the current financial year, Rs 15,000 crore will be arranged with additional amounts in future years,” said Sitharaman during her budget speech on Tuesday (July 23).

No grant, World Bank involved

Her remarks made later in the press conference make it further clear that it is not a grant per se. She said, “The 15,000 crore that we promised to them [Andhra Pradesh], we are getting it for them from the World Bank.”

In all likelihood, the words “facilitate” and “arrange” make it clear that the promised amount would be a loan that Andhra Pradesh may have to repay fully or partially depending on the Centre’s modalities.

A war of words has already broken out in Andhra Pradesh between the ruling TDP and the opposition YSR Congress. Former chief minister Y.S. Jagan Mohan Reddy’s party sought to know from the TDP and the Centre how Andhra Pradesh, a revenue deficit state, can bear the debt burden.

“Now, the Union finance minister has announced that Rs 15,000 crore will be allocated through various agencies in the next few years [for Amaravati]. Does this mean that this Rs 15,000 crore is being given as a loan? Or is it a grant? How can it benefit the state if it is given a loan? What did Chandrababu Naidu say? What is going on? By when will the capital reach completion? Isn’t this cheating the people?” asked YSR Congress.

The opposition party questioned how long would it take for Amaravati to reach its completion, given that the previous Chandrababu Naidu government had submitted to the Centre in a detailed project report that it would cost Rs 1 lakh crore for the establishment of minimum infrastructure such as roads, electricity and drainage in the capital. Between 2014-19, when Naidu was in power, Rs 5 crore was spent on Amaravati, added the YSR Congress.

Ruling TDP says Delhi will take ‘full responsibility’

The ruling TDP hit back at the YSR Congress, underlining that the Union government’s assistance for the construction of Amaravati is in the AP Reorganisation Act and hence Rs 15,000 crore is the responsibility of the Centre. “In the current economic situation of the state, whether the state gives its share or not, the Centre takes full responsibility for it,” said the TDP.

Naidu had proposed Amaravati as the capital city of the reorganised Andhra Pradesh in 2014.

Between 2014 and 2019, during his previous term as chief minister, Naidu had laid the foundation stone for the capital city and had initiated some work. However, with Naidu losing power and Y.S. Jagan Mohan Reddy becoming chief minister in 2019, the project had hit a roadblock. Reddy as chief minister had completely scrapped the idea of Amaravati as the capital and proposed a three-capital idea for Andhra Pradesh in its place.

With Naidu riding back to power in the recent Assembly elections, Amaravati as the state capital is back in the reckoning.