The leaders of the Telugu Desam Party (TDP) and the Janata Dal (United) parties, Chandrababu Naidu and Nitish Kumar, have jointly asked the central government for about ₹50,000 crore ($6 billion) for their respective states of Andhra Pradesh and Bihar in the upcoming Union Budget 2024.

The Bharatiya Janata Party (BJP) is now mostly dependent on the backing of regional parties like the TDP and JD(U) to form the government after it was unable to win a clear majority in the most recent Lok Sabha elections. These allies have presented their states with substantial financial demands in exchange.

Union Budget 2024
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Documents reviewed by Reuters reveal that the TDP and JD(U) have jointly asked for an additional ₹48,000 crore in funding for the current fiscal year, which ends in March 2025. This includes a proposal to increase from ₹1.3 lakh crore to ₹1 lakh crore the amount of unconditional long-term loans that the federal government extends to all states for funding infrastructure.

State Demands and Financial Requests

Andhra Pradesh's chief minister, Chandrababu Naidu, has personally asked the federal government for financial assistance totaling more than ₹1 lakh crore ($12 billion). This comprises:

Adding 0.5% to the existing 3% of state GDP fiscal deficit ceiling, or about ₹7,000 crore
₹50,000 crore to build the new state capital of Amaravati.
₹12,000 crore for the Polavaram irrigation project.
₹15,000 crore over the next five years will be used to settle past-due debt.
₹10,000 crore will be used for infrastructure development under the central government's 50-year loan scheme.

Union Budget 2024
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Challenges Faced by the Central Government

In the meantime, 9 new airports, 2 power projects, 2 river water programs, and the creation of 7 new medical colleges are among the projects that the state of Bihar, led by Chief Minister Nitish Kumar, has requested funding for.

The central government is expected to face a great deal of difficulty in preparing the Union Budget 2024 because of the substantial demands made by these important NDA partners. To keep the support of these states and carry on governing at the center, the BJP-led government might have to give in and give these states a lot of money.

It is anticipated that creating the budget will require the central government to perform a careful balancing act between upholding its growth objective, preserving fiscal responsibility, and accommodating state needs.

The results of these talks will be carefully monitored because they may have significant effects on the financial situation of the nation in the years to come.

Andhra Pradesh held 4.047% of the Budget in 2023–2024 (or 49364.61 crore rupees), while Bihar held 10.058% (122685.76 crore rupees). According to the approved recommendations of the Fifteenth Finance Commission, the states will get 41% of the net proceeds from shared central taxes, making the total Union Budget for the Revised Estimates of 2023–2024 ₹1,218,652.59 crore. Uttar Pradesh received the largest allocation (17.323%), followed by Maharashtra (6.317%) and Bihar (10.058%).

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