Andhra Pradesh

Naidu’s Amaravati project on the death bed

From Rs 3168 crore budgetary allocation in 2015-16, Amaravati has got a meagre Rs 500 crore in the YSR Congress government’s first budget for 2019-20. The allocation is a clear pointer to the political thinking of the Jaganmohan Reddy government on Amaravati. The amount will be just about sufficient to pay money to farmers who had given their land to the capital city project, pension to agriculture labour and the running of the Capital Region Development Authority. 

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While it is a fact that even under the Chandrababu Naidu regime, the allocations had been consistently coming down every financial year – Rs 1500 crore in 2016-17 to Rs 1061 crore in 2017-18 to Rs 1000 crore in 2018-19 – this financial year’s sharp cut comes on the back of stoppage of works in Amaravati. 

This was on expected lines as even the Governor’s address did not make any mention of Amaravati. Under Naidu, the state capital project was the cynosure of all eyes and was his most ambitious project. Under the new government, the state capital size is likely to shrink significantly.

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Andhra Pradesh Finance minister Buggana Rajendranath’s maiden budget (pic below) instead focused more on social welfare schemes rather than the state capital. Education gets the lion’s share at Rs 32000 crore, Irrigation gets Rs 13139 crore, health Rs 11399 crore and Rs 8750 for the YSR Rythu Bharosa (agriculture). 

Naidu’s budgetary cuts for Amaravati were because his government by the middle of the term had raised close to Rs 20000 crore through external borrowings, mainly through HUDCO and banks and capital bonds on the BSE. Though it was much less than the amount Naidu envisioned Amaravati capital city will cost at Rs 51000 crore, he hoped the administrative and commercial activity he would be able to showcase after the first phase of construction, would attract more investment necessary to build the second phase. 

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But after 23 May when Jaganmohan Reddy came to power, all construction work has came to a standstill. The new government plans to order a probe into the manner in which Amaravati was chosen as the new capital region, suspecting a few senior TDP leaders benefited from the insider knowledge of the location. The real estate sector has almost collapsed in Amaravati, with land rates crashing in the area. 

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