Andhra Pradesh

Empty coffers await Jagan

As YS Jaganmohan Reddy takes over as the chief minister of Andhra Pradesh on Thursday afternoon, he is bound to be overcome with emotions of joy and a sense of relief. After all, it has been a long journey to reach the chair where his late father YS Rajasekhara Reddy once sat. 

But it will take Jagan only a few sarkaari files to realise that it is a crown of thorns. He inherits three huge problems and they promise to be his biggest challenges. 

1. A virtually empty exchequer : This is what Jagan will be staring at when he steps into office. In the first month of this financial year, Andhra Pradesh had already taken an overdraft of Rs 8000 crore. The Reserve Bank of India and the Union Finance ministry frowned upon the “financial indiscipline” of the state as it was unable to pool in resources to pay salaries of its employees. 

Payment is pending to contractors for bills worth Rs 25000 crore and this includes works already executed and supplies provided. The new finance minister, whenever he or she is appointed, will have no option but to stagger many of these payments. Given the trust deficit vis-a-vis the Chandrababu Naidu regime, it is also quite possible that Jagan’s government will want to scrutunise many of these bills to check if they are genuine or not. 

Increasing the debt burden is not an easy option. It has already increased in five years from Rs 97000 crore in 2014 to Rs 2.58 lakh crore now. Which is why Jagan hopes the Centre will bail him out with liberal funding as well as accord Special Category status to Andhra Pradesh. Though as the CM designate himself admitted, the YSRCP is now in no position to mount political pressure on the BJP to give it at the earliest. Narendra Modi has a comfortable majority in the Lok Sabha and does not need the crutches of YSRCP support. 

2. Amaravati : Even if it is seen as Chandrababu Naidu’s legacy, Jagan cannot afford to dismantle it given the investment that has gone into it. Even though the YSRCP was never in favour of destroying this multi-crop, most fertile land in Andhra Pradesh on the banks of river Krishna to construct a concrete jungle, he cannot now shift the state capital elsewhere. 
However, it is almost certain he will embark upon a two-pronged approach.

One, he is convinced that Telugu Desam honchos and their benamis resorted to `insider trading’ as Chandrababu Naidu was privy to information where the new capital was going to be located. The CM designate is certain to order an investigation into the alleged corruption in the construction work of Amaravati. Naidu had estimated that it will cost Rs 50000 crore to build the 21st century modern capital and had brought in experts from Singapore to help with the capital plan. 

There is also the caste angle to the development of Amaravati. One of the oft-heard voices on the ground during the election campaign was that Naidu’s government was seen pampering only one community, the Kammas who constitute less than 5 per cent of the state’s population. Which is why Amaravati is derisively referred to in this part of Andhra as `Kammaravati’. One of the reasons Naidu is said to have lost is because of the backlash from other communities, who voted for Jagan. 

PM Modi at the foundation stone laying ceremony for Amaravati in October 2015

Two, Jagan has been of the view that you do not need 33000 acres to build a capital, the expanse of land Naidu acquired as part of a land pooling agreement from the farmers. While the YSRCP thinks about 10000 acres would suffice, the question is how do you renegotiate the land deals with the farmers who expect returns for having given up their vocation since 2015-16. It will be a messy affair should the new government try to renege on the promises made by the Naidu regime on paper and could end up in prolonged litigation. How to resolve the Amaravati financial burden will remain one of Jagan’s biggest challenges

3. Polavaram : Jagan has hinted at reverse tendering in Polavaram project on the Godavari river. This means this is another project in which the YSRCP smells a rat. Naidu is on record to say that Rs 15585 crore has been spent so far with 65 per cent of the work on the dam complete. 
This multi-purpose project has been in the works for years now. Since it was listed as a national project under the AP Reorganisation Act, the Centre agreed to bear the cost but there is dispute over what ought to be its realistic cost. 

The original cost of the project according to 2010-11 rates was Rs 16000 crores but was subsequently escalated to Rs 55548 crore. The Naidu government contended it was because a major component of the revised estimate – Rs 33000 crore – was only towards relief and rehabilitation. In February 2019, the Technical Advisory Committee of the Central Water Commission cleared the revised estimate but now the Union Finance ministry and then the Cabinet has to approve it as well. How Jagan gets the Modi government to clear Polavaram will be a challenge. 

1 reply »

  1. What is surprising is no one mentioned this before election. On ther hand they always had great things to write about visionary


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