Five years ago on 22 October 2015, former Chief Minister of Andhra Pradesh N. Chandrababu Naidu and the Prime Minister of India Narendra Modi laid the foundation stone for the capital city of Amaravati.
Naidu envisioned Amaravati as the people’s capital right from its inception and wanted to build Amaravati as one of the most modern, sustainable capital cities in the world. Contrary to the commonly seen land acquisition schemes all over India, the government strategized a unique land pooling scheme and 28,538 farmers of the State came forward and gave 34,395.50 acres for the construction. Under this scheme, the state government acquires land from a farmer, a part of the developed land ranging between 900 and 1,700 square yards for every acre is given back to the farmer. The prestigious London School of Economics took this up as a case study.
Amaravati through a recent choice had a defining history and cultural past of its own. The Naidu-led government chose Amaravati as the capital citing a number of features. The city is centrally located with easy access from north and south, coastal districts as well as the Rayalaseema region. And had the potential of creating at least 1.5 million jobs by 2050. Thus, generating a monetary value of $35 billion GDP by 2050. In this process, the State government planned to spend Rs. 58,000 crores for developing Amaravati’s infrastructure till 2034. In terms of the project progress, tenders worth Rs. 42,170 crores were issued and works of about the same cost had commenced. The total cost incurred to the State Government on its upcoming capital Amaravati till now is Rs. 9,165.76 crores.
The previous TDP government had made considerable budgetary allocations of Rs. 3,168 crore in 2015-16; Rs. 1,500 crore in 2016-17; Rs. 1,061 crore in 2017-18; and Rs. 1,000 crore in 2018-19. Whereas since the YSRCP assumed power in 2019 Amaravati construction has taken a back foot. In the 2019-20 budget, the YSRCP government allocated just a paltry sum of Rs. 500 crores for the development of Amaravati.
With the YSRCP Government showing no interest in the construction of the capital city and its archaic policies, the investors have started abandoning the project and moved away from the State. The consortium of Singapore-based companies, Ascendas-Singbridge and Sembcorp, has pulled out of the Amaravati Capital City Start-up Area project after Y.S. Jagan Mohan Reddy canceled land allocation through a Government Order (GO MS No. 288) on 19 November 2019 and stated that GoAP has decided not to proceed with the start-up area given that it has other priorities for the state. The start-up area, once developed, was expected to contribute Rs. 1.15 lakh crore to the State’s Gross Domestic Product and generate revenue to the tune of Rs. 10,000 crores for the government.
To envision the dream of a world-class capital, beyond the conventional ideas of self-sustainability, the former CM Naidu decided to have a self-financed model. Unheard of previously, the State Government through the Electronic Bidding Platform of BSE on 14th August 2018 mobilized Rs. 2,000 crore of funds in the form of bonds. These bonds were oversubscribed by 1.53 times in less than an hour. Call it lack of vision or economic understanding the current government of the YSR Congress dented the credibility of these government bonds.
Soon after, the World Bank, on 19 July 2019, withdrew its support of $300 million for construction of the capital city after the central government announced it was not going to support the project. Not long after, Asian Infrastructure and Investment Bank (AIIB) which is a co-financier in the project decided to withdraw its investment.
Interestingly, Jagan Mohan Reddy in the year 2014 had supported Amaravati as the state capital in the assembly and after assuming power, he made a complete reversal and introduced the three-capital proposal in December of 2019. As per the new proposal, the present capital Amaravati would just serve as the Legislative Capital, Visakhapatnam would be made the Executive Capital and Kurnool would be made the Judicial Capital.
Further to strengthen his irrational and perhaps undemocratic decision, YSR Congress Chief roped in Boston Consulting Group (BCG), a private agency to submit a report in record time. Call it coincidence, but as was expected the report reiterated the YSR Congress’ Chief’s stance.
The Jagan Mohan Reddy government as part of its agenda of vendetta politics passed the Andhra Pradesh Capital Region Development Authority Repeal Bill 2020 and the Andhra Pradesh Decentralisation and Inclusive Development of all Regions Bill 2020 in the assembly. And whereas the TDP against this undemocratic agenda demanded in the Legislative Council for these bills to be referred to a select committee for further deliberation, Jagan Mohan Reddy who was miffed with these decided to dissolve the Legislative Council of the State. The AP unit of BJP has opposed the three capitals decision of the YSRCP Government and the former BJP President Kanna Laxminarayana had written a letter to Governor Biswa Bhusan Harichandan urging him not to give assent. Despite all this havoc the Andhra Pradesh Governor Biswabhusan Harichandan has given his assent and cleared these bills.
The Rajadhani Rythu Parirakshana Samithi and other individual farmers have approached the High Court and filed petitions against the Governor’s approval to bills which are currently being virtually heard by the High Court.
The Union Home Ministry in its recent affidavit to the High Court stated that the center has no role in deciding the State’s capital. The BJP State unit opposed the move and the Union Home Ministry clarified that the center has no role thus, exposing the dual stance taken by the BJP. In fact, there are murmurs that Kanna Laxminarayana was removed as AP BJP President position for going against the party stand.
The farmers of Amaravati for more than 300 days have been protesting against the three capitals’ decision of Jagan Mohan Reddy. Whereas the YSR Congress Government is trying to justify its move saying – three capitals would lead to the decentralization of development; this being stated while cleverly ignoring the financial burden and logistical inconvenience stemming from this decision.
It is also unfortunate that the ruling leaders of YSRCP have insulted the farmers who took out rallies and staged protests for more than 300 days against the three capital’s decision by terming them as “paid artists”.
Amid the COVID pandemic situation, the CAG has found that for the financial year 2020-21, the State of Andhra Pradesh had already borrowed over 83% of its projected borrowing as per the Budget estimates in just 4 months of the pandemic. This indicates the shortage of financial resources with the State Government. At a time when the State is fighting hard to build one capital, the construction of three capital turns into a question mark.