How will Naidu foot the bill?

Ahead of the Union Budget, Andhra Pradesh Chief Minister Nara Chandrababu Naidu met Union Finance Minister Nirmala Sitharaman and Prime Minister Narendra Modi, pressing for enhanced financial support to the debt-burdened state, while not pushing for a ‘special status’ for the state.

The important challenges in front of Naidu are to revive the Amaravati capital city project that had been shelved by the Jagan Mohan Reddy government, to restore the financials of the state government, and to fulfil the election promises made by the Telugu Desam Party (TDP).

The initial cost estimate of the Amaravati capital city project (with technical know-how and seed money from the Singapore government) was Rs 50,000 crore. This might have doubled by now. Just before Naidu’s term ended in 2019, a CRDA (Andhra Pradesh Capital Region Development Authority) note revealed that the total cost of phase one was Rs 51,687 crore, of which Rs 39,875 crore had been spent. To complete the remaining work in phase one, funds between Rs 15,000 to Rs 18,000 crore may be needed. Phase two of the project may take time to start.

As per media reports, Naidu has demanded Rs 15,000 crore from the Centre for the development of the capital city project.

Naidu has also asked for the early release of the Centre’s arrears for the Polavaram irrigation project, demanding a sum of Rs 12,100 crore to complete the first phase of the Polavaram project. Another major challenge before Naidu is to complete the multi-purpose Polavaram Irrigation Project. The project is being built across the Godavari River to provide irrigation facilities to over 700,000 acres of farmland in coastal Andhra Pradesh, besides producing 960 MW power, for which the Union government had accorded ‘national project status’ as per assurances given at the time of bifurcating the state. The previous project cost estimate of Rs 55,548 crore, based on 2017-2018 price levels, would have shot up considerably. As per a white paper released on Polavaram, Rs 12,157 crore will mostly be required to complete the first phase of the Polavaram project.

Naidu has also highlighted that the state’s debt increased considerably under the Y S R Congress Party government, due to which public debt has increased from 31.02 per cent of the Gross State Domestic Product (GSDP) in 2019-2020 to 33.32 per cent in the 2023-2024 fiscal. As per the Andhra Pradesh Budget 2023-2024, the outstanding liability of the state, without accounting for off-budget borrowings, was Rs 3.5 trillion. The state debt would increase to Rs 4.3 trillion if off-budget borrowings are included. It is not clear as to what is the nature of the assistance demanded by Naidu from the Centre to resolve Andhra Pradesh’s high debt burden.

The ‘super six guarantees’ were announced by TDP general secretary Nara Lokesh on February 11. It included generating 2 million jobs for the youth, providing a monthly unemployment allowance of Rs 3,000, and giving the parents of school-going children Rs 15,000 under the Thalliki Vandanam scheme. The guarantees also include benefits for farmers like an annual grant of Rs 20,000 under a scheme titled Annadata, providing three free cylinders annually to every household, and Rs 1,500 per month to every woman above 18 years. As part of the ‘super six’ guarantees, pensions have been increased from Rs 3,000 to Rs 4,000 per month for the elderly, widows, weavers, toddy-tappers, fishermen, single women, traditional cobblers, transgenders, artists, dappu artistes, and patients undergoing antiretroviral therapy.

It’s almost a month since the TDP won the election and Naidu came to power. The estimate for fulfilling these guarantees for July is estimated to be around Rs 10,000 crore. An additional reimbursement of around Rs 2,000 crore per annum is due to the Andhra Pradesh State Road Transport Corporation for offering free bus rides to women.

With 16 Lok Sabha MPs, Naidu’s TDP is a key ally in the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government. In the mid-1990s coalition era, Naidu was considered a ‘kingmaker’ who drove hard political bargains, be it in the United Front government or the A B Vajpayee-led NDA-1 government. Three decades later, a mellower Naidu seems to be prioritising Andhra Pradesh’s interests over political power or posts at the national level.

Naidu has an unenviable task of completing the Amaravati capital city project, restoring the state finances to health, and fulfilling the super six guarantees promised by his party to the people of the state.

(The writer is a retired corporate professional)