While Andhra Pradesh hasn’t received the Special Category Status in the Union Budget 2024-25, Union Finance Minister Nirmala Sitharaman remarked on Tuesday, July 23, that special financial support through multilateral development agencies will be provided to Andhra Pradesh for developing Amaravati as its capital.
“Rs 15,000 crores will be arranged with an additional amount in future years will be arranged to the state,” she said, adding that the NDA led government is committed to financing and completing Polavaram – the lifeline of Andhra Pradesh and its farmers. This will facilitate our country’s food security as well,” she said.
The Finance Minister’s statement is in keeping with clause (2) Section 90 titled ‘Polavaram Irrigation Project to be a national project’ of the AP reorganization act. “It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation and development of the Polavaram Irrigation Project for the purposes of irrigation,” the clause reads.
“Under the AP Reorganisation Act, for promoting industrial development funds will be provided for essential infrastructure such as water, railways, power and roads in Kopparthi node in Visakhapatnam- Chennai industrial corridor and Oravackal node on Hyderabad-Bengaluru industrial corridor,” she added.
While the National industrial corridor development and implementation trust had started work on these corridors in Andhra in 2023, the Budget reflects additional support for Visakhapatnam-Chennai and Hyderabad-Bengaluru Industrial Corridors aimed at “development acceleration.”
“An additional allocation will be provided this year towards capital investment for economic growth. Grants for backward regions of Rayalaseema, Prakasam, North Coastal Andhra as stated in the act will be provided,” she said.
The Finance Minister is referring to clause (3) Section 46 titled ‘Distribution of revenue’ under the Reorganisation Act which states that “the Central Government shall, while considering the special development package for the successor State of Andhra Pradesh, provide adequate incentives, in particular for Rayalaseema and north coastal regions of that State.”
Less than two months ago, the Bharatiya Janata Party (BJP) won the Lok Sabha elections and formed the government along with its NDA partners. The TDP which is part of the NDA has 16 members. TDP sources told TNM that TDP chief and Andhra Chief Minister Chandrababu Naidu’s trips to New Delhi were to put forth demands for Polavaram and development of Amaravati as capital.
Earlier this month, CM Chandrababu Naidu had released white papers on both the Polavaram Project and Amaravati, and criticised the former YSRCP led state government for not ensuring progress in both cases. While discussing Polavaram, the CM said that the project of Rs 55,548 crore was stalled.
Naidu further claimed that the former Jagan Mohan Reddy led government had halted works in the Amaravati from 2019 to 2024, which left dues worth Rs 1,269 crore and also accused them for cancelling World Bank funding of $300 million and blocking central government grant of Rs 1,000 crore.
No Special Category Status for any state
Aside from Andhra Pradesh, Bihar and Odisha have also been demanding Special Category Status (SCS) for several years now. On Monday, July 22, MoS Finance Pankaj Chaudhary said that the Inter-Ministerial Group had discussed the demand for SCS to Bihar in its meeting, ‘but based on the existing criteria Bihar did not qualify.’
“The SCS for plan assistance was granted in the past by the National Development Council (NDC) to some states that were “characterized by a number of features necessitating special consideration”.
The demand for SCS also came from Odisha and has been made several times by former CM and Biju Janata Dal (BJD) chief Naveen Patnaik as Odisha has been prone to natural disasters like cyclones and floods every year resulting in massive damage to infrastructure. Similarly, Bihar argued that their fiscal situation has been adversely affected by the bifurcation of the state (formation of Jharkhand) that caused industries to move to Jharkhand, lack of sufficient water resources for irrigation, and frequent natural disasters.
While none of the states got Special status, the Finance Minister in the 2024-25 Budget did remark that there would be focus on the all round development of Bihar, Jharkhand, Odisha, West Bengal and Andhra Pradesh. “The focus on ‘Eastern Corridor’ will cover human resource development, infrastructure and generation of economic opportunities to make the region achieve Viksit Bharat (Developed India),” she said.
Additionally, to aid their second most powerful NDA partner, the Janata Dal (United) led by Bihar Chief Minister Nitish Kumar, the Finance Minister announced an industrial support load at Gaya on the Amritsar-Kolkata industrial corridor. “This corridor will catalyze industrial development of the eastern region and the load at Gaya will be a good model for developing ancient centers into future centers of modern economy,” she said.
Bihar also got a slew of road connectivity projects in the 2024-25 Budget with funds being put aside for Patna-Purnia Expressway, Buxar-Bagalpur Expressway, Bodhgaya, Rajgiri, Vaishali and Darbanga spurs as well as an additional tool of Rs 26,000 crores in bridge over river ganga over Buxar.
The state also received power projects including setting up of a 2400 megawatt power plant at Pirpainti will be taken up at cost of Rs 21,400 crore rupees
“New airports, medical colleges and sports infrastructure in Bihar will be constructed. Further the request of Bihar government for external assistance from multilateral development banks will be expedited,” she said.