Budget 2024: Can Rs 15,000 crore for Amaravati revive Andhra Pradesh's capital dreams?

The project, long a dream of N Chandrababu Naidu, newly returned chief minister of the state, had run into issues leaving it a ghost city

By Manu Balachandran Forbes India Staff

Published: Jul 23, 2024 03:47:24 PM IST

Updated: Jul 23, 2024 03:53:31 PM IST

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The Rs 15,000 crore allocation for the enhancement of Amaravati in Andhra Pradesh is aimed at revitalising the city project Image: Vikas Chandra Pureti for Forbes India

He asked for it. And he was given exactly that. That’s the power of being an ally in coalition politics.

Ahead of the Union Budget 2024, N Chandrababu Naidu, the newly returned chief minister of Andhra Pradesh, had sought Rs 15,000 crore from the central government to build Andhra Pradesh’s new capital, Amaravati. The capital in Amaravati has long been a dream of Naidu, often credited with building Hyderabad into one of India’s tech capitals before Andhra Pradesh (AP) was split into two.

In 2014, the erstwhile state of AP was split into Andhra Pradesh and Telangana, with Hyderabad serving as the common capital until 2024. After this date, it would remain Telangana’s capital alone, forcing AP to scout for a new one.

Amaravati was first announced as the capital of AP in 2015, soon after Naidu became the CM following TDP’s victory in the 2014 AP state elections. The decision to make Amaravati the capital was accepted by all political parties in the state, and it only helped that Naidu was also supporting Prime Minister Narendra Modi’s National Democratic Alliance (NDA) government at the Centre. It was the PM who laid the foundation for the new city and, over the next five years, the state government spent over Rs 10,000 crore towards building the city’s infrastructure.

But a decade since the decision to make the fertile and ancient land into its new capital city, Amaravati remains a dream on paper, having run into issues that plague many Indian cities. The lack of political willpower, shifting priorities, and political mudslinging have left it like a ghost city of sorts, with the only functional buildings being the Andhra Pradesh High Court and its legislative assembly.

“Recognising the state’s need for a capital, we will facilitate special financial support through multilateral development agencies,” Finance Minister Nirmala Sitaraman said in her budget speech. “In the current financial year, Rs 15,000 crore will be arranged, with additional amounts in future years.”

That’s a significant payout for a project that intends to become one of the world’s foremost sustainable cities, at a time when cities across the world feel the pinch of congestion and rapid population growth amidst dwindling infrastructure. Amaravati’s master plan was developed by London-based Foster + Partners and envisages a governmental complex in the city’s centre, with a strong urban grid surrounding it. A green patch, inspired by Lutyens’ Delhi and New York’s Central Park, runs through its length, with 60 percent of the area occupied by greenery or water.

Also read: Amaravati: The lost city awaiting resurrection

The city’s transportation needs will be met by electric vehicles (EVs), water taxis, and dedicated cycle routes, along with shaded streets and squares that will encourage people to walk through the city. Then there are 13 urban plazas, the first of which will be the legislative assembly building, sitting within a large freshwater lake. The city is divided into nine zones, namely government, sports, health, electronics, tourism, knowledge, finance, justice, and media city. The city also wants to build an inclusive community that follows a 5-10-15 principle: 5 minutes to emergency facilities, 10 minutes to open spaces, and 15 minutes to work.

More than 34,000 acres of land was collected through a unique land pooling scheme towards setting up what Naidu had called a “people’s capital”; in all, 29,881 farmers, big and small, parted with their lands. But, in 2019, the project fell into an abyss, after Naidu lost power in the state, and a new government under YS Jaganmohan Reddy took charge. Before that, the Naidu government had completed projects worth Rs 10,000 crore that included roads and new office buildings, while private institutions including SRM and VIT were allotted land to set up their facilities.

Jagan then mooted the idea of three capitals, instead of one in Amaravati, which led to protests from the farmers who had given up their land, before the Andhra Pradesh High Court came down harshly on the plan to build three cities. Now, under Naidu, the Amaravati plan has received a boost, leading to significant growth in real estate prices in the region.

It is into this mix that the central government has decided to offer significant financial support to help build Naidu's dream capital, in addition to various projects for Andhra Pradesh, which includes the Kopparthy Industrial Node, the corridor between Visakhapatnam and Chennai and special grants for backward regions of Rayalaseema, Prakasam, and North Coastal Andhra Pradesh.

“The Rs 15,000 crore allocation for the enhancement of Amaravati in Andhra Pradesh is aimed at revitalising the city project,” says Anuj Puri, chairman and CEO of ANAROCK Property Consultants. “This initiative, which had encountered delays, encompasses blueprints for broadened roadways overpasses, an international airport and a metro system. The total cost of the development is anticipated to reach Rs 40,000 crore, twice the initial projection.”

For Naidu and Andhra Pradesh, all that means the party is only getting started.