Has the presence of Prime Minister Narendra Modi in the foundation stone laying ceremony of Andhra Pradesh’s new capital, Amaravathi, done more damage than good to the State Government?

The developments in the aftermath of the ceremony, held earlier on October 22, and the transformation of celebrations to protests with burning effigies of Modi across the State, are bound to encourage this line of thought, thanks to a new round of politics on the capital and special status.

Despite wide expectations that Modi would come forward to support the cash-strapped State by announcing a package for the capital or special status for the State, nothing has actually come out of the event. The Prime Minister had just brought a pitiful of soil collected near the Parliament building and water from the Yamuna, to make the new capital ‘auspicious and holy’. However, he skipped financial aspects completely in his address and only said that the AP Reorganisation Act would be implemented in letter and spirit.

On his part, Chief Minister N Chandrababu Naidu only requested for a ‘package’ but not special status. This fuelled allegations of a ‘deal’ between him and Modi to subvert the demand for special status from the opposition YSR Congress and Left parties.

All this has Naidu groping for self-defence instead of basking in the glory of the event.

What next?

The big question is how the Government will address the issue of finances for Amaravathi.

To begin construction itself, basic infrastructure like roads and water need to be provided as without them, workers cannot start the actual work. This alone involves huge expenditure, given the 217 sq km capital city even if we don’t include 7,420 km of the entire capital region!

The Chief Minister is pinning hopes on the NITI Aayog report on financial needs (it is not clear whether it is examining a package or special status), which is expected in about a month or two. There is also no certainty about a positive report. In this context, the State Government needs to come clean on the whole issue of special status and the actual financial closure for the capital city project, before a single brick could be moved.

Attempts should also be made to achieve political consensus to the maximum possible extent.

Even if special status is not on the cards, there are other ways to approach the issue. It can press for special category State, which can be decided by the Finance Commission (Art 280 of constitution). The commission is empowered to recommend a special grant for Andhra Pradesh under ‘special’ circumstances of the need to build a new capital.

There are 11 States that are enjoying special category status.

Fund classification

Further, the inflow of other funds being released from the Centre for the smart cities project, among others, needs to be differently accounted for, so as to avoid confusion.

More importantly, the master plan of Amaravathi almost promises a ‘heaven on earth’. This raises many pertinent questions – What is the cost of building such a massive urban conglomerate? From where will funds come? What will be modalities of public private partnership (PPP) contract for capital and their financial implications? However, answers are yet to come from the leaders.

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