How Construction Of Amaravati May Aid Andhra Pradesh's Case For A Special Package

The state of Andhra Pradesh may stand to gain a chance for financial assistance from the central government through a special package that could aid construction of its capital Amaravati, NDTV Profit has learnt from an official with knowledge of the matter.This comes at a time when the newly formed allies Bihar and Andhra Pradesh, who are key political contributors to the National Democratic Alliance, have expressed their demand for a 'special category status'—a concept that ceased to exist since the Planning Commission was dissolved in 2014, and the 14th Finance Commission report later that year dispensed with the provision.Contributing 16 seats to the 292-seat NDA alliance in the 2024 Lok Sabha elections, the Telugu Desam Party's demand for 'special category status' comes laced with political implications for the Modi 3.0 government. For TDP, the resumption of the work towards reinstating the capital Amaravati is a key promise made by the newly elected Chief Minister Chandrababu Naidu.It is to be noted that the provision for special financial assistance and the construction of the Amaravati capital, which was shelved during the tenure of the outgoing Jagan Mohan Reddy-led-Yuvajana Sramika Rythu Congress Party, is a topic as old as the bifurcation of the states of Telangana and Andhra Pradesh in 2014."We can't mix up the case for special status for Bihar and Andhra Pradesh," NR Bhanumurthy, vice chancellor at Dr BR Ambedkar School of Economics University, told NDTV Profit. "Bihar is compensated under Finance Commission grants, but in the case of Andhra Pradesh, it doesn't get these grants as it is considered a better performing state," he said.Bhanumurthy noted that a case for special status may possibly be given in the form of financial assistance towards the construction of the capital Amaravati, as it has already received the President's assent and was previously passed in the Parliament.The Andhra Pradesh Reorganization Act includes financial assistance towards the construction of a state capital, according to another official, who spoke on the condition of anonymity. While this was provided for, it was not fully disbursed at the time, the official said.A 2023 compliance report by the Comptroller and Auditor General of India for financial year 2021 on Andhra Pradesh explains why. The report noted that the state government's land acquisition route for the capital had caused "a huge financial burden". It also raised concerns on the incomplete status of the infrastructure project despite the financial resources incurred on it."Lackadaisical approach of the state government to submit the clarifications required by Government of India on the Detailed Project Reports resulted in non-release of further financial support for the creation of essential facilities in the new capital of the successor state of Andhra Pradesh," it said.Bhanumurthy also told NDTV Profit that effective assistance towards building the state capital this time around could be channelled through respective line ministries to better direct the funding..Amaravati To Be Sole Capital Of Andhra Pradesh, Says CM Chandrababu Naidu.The erstwhile special category status granted a state with the benefit of greater assistance from the central government towards Centrally Sponsored Schemes in a 90:10 ratio, with the central government bearing the larger 90% in the form of a grant.Another possibility for treatment similar to ‘special category status’ could be arrived at by reworking the sharing pattern of centrally sponsored schemes, with the central government shouldering the larger portion, the first official said.However, the latter is also expected to prompt other states to demand the same on the back of their own socioeconomic situations, making it less desirable..How Chandrababu Naidu's Return To Andhra Pradesh Will Impact Tamil Nadu Investment Push

How Construction Of Amaravati May Aid Andhra Pradesh's Case For A Special Package

This comes at a time when the newly formed allies Bihar and Andhra Pradesh, key political contributors to the NDA, have expressed their demand for a 'special category status'.

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How Construction Of Amaravati May Aid Andhra Pradesh's Case For A Special Package

This comes at a time when the newly formed allies Bihar and Andhra Pradesh, key political contributors to the NDA, have expressed their demand for a 'special category status'.

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