Budget bonanza for AP: Naidu wins much praise, but Rayalaseema sulks

In a major boost to Andhra Pradesh, for the first time after many years, the Union budget recognised the need to implement certain important provisions related to the development of residual Andhra Pradesh incorporated in the Andhra Pradesh Reorganization Act 2014.

Even though the same Narendra Modi-led government has been at the Centre for the past 10 years, in a first, Andhra Pradesh has been allocated a whopping ₹15,000 crore for the current fiscal year.

Presenting the budget for 2024-25, financeminister Nirmala Sitharaman announced amid thumping of benches by NDA members from Andhra Pradesh that the Centre had recognised the state’s need for a capital.

Bonanza for Andhra

This kind of a clarity on the part of the Centre towards Andhra Pradesh has been missing for a decade. But, this bonanza for Andhra has come as fortunes have now turned at the Centre and the BJP-led NDA has to depend on Andhra Pradesh Chief Minister Chandrababu Naidu to survive in the Lok Sabha.

It is, in a way, a victory for the people of Andhra Pradesh, noted economist Prof KS Chalam from Vizag told The Federal. He hoped Andhra will get more funds and projects in the future.

Outcome of elections

“The Centre had to reverse its policy towards Andhra because of the verdict the people gave to the TDP-Jana Sena-BJP alliance in the Lok Sabha elections. Also, the BJP’s need to have Naidu’s crucial support for its government at the Centre forced the finance minister to declare the commitment to implement AP  Reorganization Act 2014 in clear terms,” said Chalam, a former vice chancellor of Andhra University in Vizag.

Further, Chalam asked, "Why was this type of commitment missing in past budgets?"

‘Correctional budget’?

“In fact, there was nothing new in the budget proposals. In 2015, the same Centre had announced ₹350 crore to each district in backward Rayalaseema and North Andhra. The amount was taken back. Now the Centre has made a categorical commitment to provide assistance as per the Act,” he pointed out.

Terming the budget as a "correctional" one, economic commentator D Paparao said, “The Centre has never been so unambiguous in its obligation to implement the provisions of the AP Reorganization Act 2014 as it was spelt out in the budget today.” 

First soil, now money

It was Prime Minister Narendra Modi who laid the foundation stone for the construction of Amaravati capital city in October 2015. Instead of announcing grants as expected by the people and the then chief minister N Chandrababu Naidu, PM Modi distributed some soil and water brought from New Delhi. This created a political storm in the state.

The non-release of funds for backward districts and for Amaravati, and for not completing the construction of Polavaram, a national project, as per the same Act, finally led Naidu to withdraw support from the NDA government in 2018.

Today, the budget presented by Sitharaman is a clear departure from the stance the Centre had adopted towards Andhra Pradesh since 2015.

TDP’s clout in NDA

"Telugu Desam Party chief Naidu seems to have successfully used his clout in getting this commitment from the Centre," observed Paparao. “This time, the Centre cannot renege on its assurance incorporated in the budget,” he added.

In his recent meetings with the prime minister, Naidu urged the Centre to facilitate World Bank assistance to the construction of the capital.

In fact, the World Bank had agreed to provide funding to Amaravati when Naidu was in power between 2015 and 2019. But the Centre withdrew its request to the World Bank for financing the proposed Amaravati Sustainable Infrastructure and Institutional Development Project after YS Jaganmohan Reddy became the chief minister in 2019. Now, the request will be revived.

Boosting eastern India

Sitharaman also included Andhra Pradesh in a new scheme titled Purvodaya, which is meant for the development of the country’s eastern region, encompassing the states of Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh.

Also, lauding the Polavaram irrigation projectbeing built across river Godavari, as the lifeline for the state and farmers, the minister vowed to finance and quickly complete the Polavaram project. She said this would facilitate the country’s food security as well.

Other projects

In another announcement, Sitharaman said two nodes on the two industrial corridors proposed in the state would also be developed. “Funds will be provided for essential infrastructure such as water, power, railways and roads in Kopparthy node on the Visakhapatnam-Chennai Industrial Corridor and Orvakal node on the Hyderabad-Bengaluru Industrial Corridor,” she said.

The finance minister also promised additional allocation towards capital investment for economic growth this year.

Rayalaseema disappointed

Yet, this budget has not pleased some sections in Andhra. Farmers leaders like Bojja Dasaratharami Reddy were disappointed over the vague statements made by the finance minister.

Except the ₹15,000 crore assistance promised to Amaravati, there was nothing concrete in the minister's speech, said Reddy, a prominent leader from Rayalaseema.

“Mere reiteration that we would do this and that as per the Act won’t help the state. If one were to recall, ₹35,000 crore was announced for Rayalaseema in 2015. Where has it gone? Now the minister's assurances are vague. None of them is quantified. The Centre is silent on the steel plant promised to be set up in Rayalaseema. Similarly, Sitharaman has not talked about four irrigation projects, Telugu Gangan, Galeru-Nagari, Handri-Neeva and Veligonda meant to provide water to backward Rayalaseema. They are linked to Nagarjuna Sagar Tailpond and Dummugudem projects in Telangana. This is nothing but perpetuation of injustice to Rayalaseema,” he said.

Naidu backers overjoyed

On the other hand, TDP veteran and former finance minister Yanamala Ramakrishnudu is upbeat.

Stating that chief minister Naidu’s visits to New Delhi had yielded expected results, he said now the capital construction would be completed expeditiously. “Whatever the state government demanded has been incorporated in the budget. It’s an achievement for people in Andhra,” said the TDP leader.