Union Budget 2024 earmarks ₹15,000 crore for Andhra Pradesh’s new capital city

Finance Minister Nirmala Sitharaman made a major announcement on July 23, 2024, during her Union Budget 2024 speech, announcing an allocation of ₹15,000 crore for the development of Andhra Pradesh’s new capital. With this financing, the state’s designated capital, Amaravati, will get help for its infrastructure and development, as promised under the Andhra Pradesh Reorganisation Act.

“Our government has made efforts to fulfill the commitments in the Andhra Pradesh Reorganisation Act,” Sitharaman said, underscoring the government’s commitment to satisfying the developmental requirements of Andhra Pradesh and Understanding that the state requires funds, we will work with multilateral organizations to arrange special financial support. This budget will contain extra funding in the upcoming years in addition to covering the current fiscal year.

Union Budget 2024’s Impact

The declaration is in line with the state’s continuous endeavors to designate Amaravati as its unique capital. Following a period of confusion surrounding the capital’s location, Chief Minister Chandrababu Naidu’s earlier proclamation in June 2024, which reaffirmed Amaravati’s position, gave this proposal momentum.

Supporting Amaravati is viewed as a calculated effort to bring in investments and stabilize the real estate market, especially in light of the 2019 political changes that had an impact on development plans and land values.

Strategic Investments in Amaravati

The allocation of ₹15,000 crore is anticipated to catalyze several infrastructure projects that are vital to the growth of the city. Sitharaman emphasized the significance of finishing the Polavaram project, a significant irrigation project, and enhancing vital services including power, water supply, and transportation networks. These initiatives are essential to establishing a favorable environment for both locals and enterprises.

The statement has already had a beneficial effect on the stock market, as evidenced by the notable increases in the shares of various Andhra Pradesh-based businesses, such as KNR Constructions and Andhra Cements. This is a reflection of investor confidence in the region’s potential for growth in the wake of the government’s infrastructure development pledge.

In the future, the government’s emphasis on creating business districts and offering incentives to important businesses is anticipated to significantly boost the region’s economy. The investment for Amaravati is a component of a larger plan to improve the state’s economic climate and draw in both foreign and domestic companies.

The World Bank-backed Amaravati Sustainable Capital City Development Project (ASCCDP) is an all-encompassing endeavor to construct vital urban infrastructure in Amaravati. Over 35 years, this project is divided into three phases and is focused on:

Urban services include building infrastructure for road connectivity, sanitation, and flood protection.

Increasing the local government’s ability to efficiently manage urban services is known as public urban governance.

Green infrastructure refers to the application of pro-poor and climate-resilient urban investments and infrastructure components to guarantee sustainability and inclusivity.

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