Funds for Amaravati, Polavaram project among Andhra’s 5 demands to FM

Funds for Amaravati, Polavaram project among Andhra’s 5 demands to FM

Leveraging its position as a significant component of the NDA government at the Centre, the TDP-led Andhra Pradesh government’s Finance Minister Payyavula Keshav put forth five demands before Union Finance Minister Nirmala Sitharaman during pre-budget consultations Saturday.

The state government also demanded some special financial package to close the state’s estimated revenue gap since 2014-15, a higher borrowing limit for the state and other benefits given to special category states for industrial promotion.

Promising “continued support” to the NDA government “in achieving Viksit Bharat by 2047”, the TDP government has asked the Centre to make a “provision for state development assistance” in the upcoming Union Budget 2024-25 exclusively for the state. However, the amount of funds under this provision has not been specified by the state but the government mentioned its economic losses in the aftermath of its bifurcation in 2014.

Assistance to be sought by the Andhra Pradesh government could include funding the centrally sponsored schemes in the 90:10 ratio between the Centre and the state and the Centre providing 90% of funds in externally-aided projects as grants to the state and 10% as loan to the state.

Andhra could also seek taking out external loans from the set fiscal deficit limit of 3% of gross state domestic product for states, so that the space for internal borrowing goes up, a provision not available to any state at present.

Second, the government has asked for central assistance in building Amaravati as the “sole capital of Andhra Pradesh” and the state government has asked for an allocation of Rs 15,000 crore towards essential infrastructure development.

Officials in the know of the matter said that the provisional estimates to construct Amravati city is around Rs 1 lakh crore, of which essential infrastructure like the Raj Bhawan, high court, secretariat, legislative Assembly and Council as well as land development and trunk infrastructure could cost over Rs 50,000 crore in the next five years.

Other planned projects in Amravati include its connectivity to all districts of the state, metro rail projects to Vijayawada, Visakhapatnam and Amravati as well as high speed trains connecting Visakhapatnam and Chennai.

The state has also asked for “multi-year allocation for the competition of Polavaram National Irrigation Project” which is expected to fulfil the state’s drinking water, irrigation and power needs. The project’s total cost stood at around Rs 55,500 crore when it was approved by the Technical Advisory Committee in 2019.

Last year, the Jal Shakti Ministry, in its reply to Parliament, said the Andhra Pradesh government had submitted a revised cost estimate of Rs 17,144.06 crore for the remaining work for the first phase of the project. It added that in a subsequent Office Memorandum, the Finance Ministry had agreed to provide additional funding of around Rs 13,000 crore for the project, subject to Cabinet approval.

Andhra Pradesh is also likely to ask for grants for development of its backward districts on the lines of the Koraput-Bolangir-Kalahandi special plan in Odisha. For north-coastal Andhra Pradesh, Rayalaseema and Prakasam district the state has asked for “grants under special development programme”. The state government had already submitted a proposal to the central government for grant of Rs 24,350 crore as part of a special development programme. It is learnt that the Centre had sanctioned Rs 50 crore annually for each district for six years, totalling Rs 2,100 crore.

Towards the development of these backward regions, the state is also likely to seek additional funds in the backdrop that the state’s Rayalaseema Drought Mitigation Scheme and the Babu Jagjeevan Ram Uttarandhra Sujala Sravanthi Project are looked at in consonance with the centrally sponsored scheme of PM Krishi Sinchayee Yojna.

Assistance for development of industrial parks across the state with a special emphasis on two nodes under Visakhapatnam-Chennai industrial corridor and one node under Hyderabad-Bengaluru industrial corridor for the state was also one of the demands. Andhra is also likely to seek that 90% of loans from Asian Development Bank for the Visakhapatnam-Chennai industrial corridor is sanctioned as grants. The Centre and the ADB had approved the cost of $550mn for the corridor with a contribution of $215 million from the state government.

The government has also asked for a mega textile park and integrated aqua park which will boost the state’s industrial development.

The focus on special packages is in line with what several TDP leaders had told The Indian Express earlier. They had explained that special packages allow special treatment and financial assistance for the state. A senior leader had said, “For Andhra Pradesh, we will get even more than what can be achieved under the special category status.”

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