Support the Rebuilding of Andhra Pradesh: CM Chandrababu Naidu Appeals to 16th Finance Commission.
Key Points from the CM's Presentation to the 16th Finance Commission:
• Revival of Central Schemes: CM Nara Chandrababu Naidu stated that of the 93 Central schemes stalled under the previous government, 72 have been restarted within the last 10 months of the current administration.
• Warm Welcome to the Commission: The CM personally welcomed the 16th Finance Commission delegation at the Secretariat and guided them through a photo exhibition showcasing the state's progress and development plans, including Amaravati, Polavaram, and the Banakacharla linkage project.
• Showcasing Amaravati Vision: The government's vision for the capital city was presented through a detailed video presentation. The CM emphasised that the absence of a capital city has severely hampered revenue generation.
• Economic Damage under Previous Govt: CM Chandrababu Naidu explained the severe economic setbacks caused by the previous administration’s mismanagement between 2019 and 2024, highlighting the loss in revenue, rising debt, and stalled projects.
• Special Appeal for Additional Support: Given the state’s unique post-bifurcation challenges, the CM requested the Finance Commission to recommend special allocations and financial support from the Centre.
Amaravati, April 16, 2025: Chief Minister N. Chandrababu Naidu appealed to the 16th Finance Commission to extend special financial assistance to Andhra Pradesh, emphasizing that rebuilding the state is crucial not only for its future but also for the nation's progress. “If you help us stand today, we will play a key role in India’s success tomorrow,” the CM said, urging the Commission to understand the state’s unique challenges and support its vision for a ‘Swarnandhra 2047’.
Praise for Arvind Panagariya’s Role:
Calling Arvind Panagariya a visionary, CM Naidu recalled how Panagariya had recommended transferring the Polavaram Project to the state during his tenure in NITI Aayog. “We aim to complete Polavaram before the upcoming Pushkarams, and I invite you to its inauguration,” the CM added.
Changing Face of India Under PM Narendra Modi:
The CM praised Prime Minister Narendra Modi’s leadership, under which India is evolving into a developed nation. From being mocked for slow growth, India is now the 5th largest economy and is set to become the 3rd largest by 2028. “By 2047, we will be the world’s largest economy,” he stated, stressing India’s rise in global stature.
Greatest Challenges in Four Terms as CM:
“Despite serving four terms as CM, I’ve never faced challenges of this magnitude,” said Naidu, criticizing the previous government's financial recklessness, including pledging even Tahsildar offices and mortgaging future revenues. “We are determined to overcome this and rebuild the state through good governance, balancing welfare and development.”
Hats off to WhatsApp Governance:
Following the presentation, the members of the Finance Commission expressed their views on various subjects.
The Chairman and members of the Commission appreciated the Andhra Pradesh government’s WhatsApp Governance initiative. Commission Chairman Arvind Panagariya asked the Chief Minister whether this innovative model had been brought to Prime Minister Narendra Modi’s attention. The CM replied that it hadn’t yet, but he planned to explain the project during his scheduled meeting with the Prime Minister next month.
The Chief Minister highlighted that the government is working towards a system where citizens can access public services via WhatsApp, eliminating the need to visit offices. He stated that the goal is to provide up to 1,000 services through WhatsApp shortly. Panagariya noted that it was impressive for a Chief Minister to personally deliver a detailed presentation on financial matters and commended the depth of analysis on growth indicators and efforts to seek Central assistance.
Finance Commission member Anne George Mathew recalled her visit to Hyderabad 30 years ago, observing the city’s remarkable development since then, which she credited to Chandrababu Naidu’s vision. She expressed confidence that Amaravati would be developed to similar standards under his leadership.
CM Chandrababu Naidu’s Presentation to the 16th Finance Commission on AP’s Financial Status:
Advantages for AP’s Growth:
Andhra Pradesh, with the longest coastline in India, acts as a gateway to Eastern countries. The state hosts three major industrial corridors—Visakhapatnam-Chennai, Chennai-Bengaluru, and Bengaluru-Hyderabad. It also has six seaports and seven airports. AP contributes 5.8% to the country’s exports. It leads in adopting emerging technologies such as Blue Economy, IT, Knowledge Economy, Quantum Valley, Drones, IoT, and Blockchain. The state is also emerging as a hub for green energy, particularly in green hydrogen, solar, and ammonia.
Strategically located near Hyderabad, Bengaluru, and Chennai, Amaravati’s development is part of a larger plan to transform South India into a major growth engine contributing to the Viksit Bharat (Developed India) goal.
Swarnandhra 2047 Vision:
As part of India’s vision to become a developed nation by 2047, AP has framed its own "Swarnandhra 2047" vision. The aim is to build a “Healthy, Wealthy, and Happy” Andhra Pradesh. The state is implementing a ten-principle plan focusing on fulfilling the basic needs of every family—housing, toilets, piped water, cooking gas, uninterrupted electricity, and high-speed internet. Infrastructure upgrades are underway in villages, including roads, drainage, waste-to-wealth centers, energy-efficient street lighting, and strengthening schools and health centers.
Innovative P4 Initiative:
To eliminate poverty, the P4 (Public-Private-People Partnership for Prosperity) initiative aims to empower the poorest 20% of the population by involving the wealthiest 10% in their upliftment. The government is also focusing on population growth and equity.
2047 Economic Targets:
• Achieve a 15% annual growth rate.
• Transform AP into a $2.4 trillion economy.
• Reach $42,000 per capita income.
• Increase exports to $450 billion.
• Extend average life expectancy to 85 years.
• Achieve 100% literacy and reduce unemployment to below 2%.
Investment Requirements:
To achieve these targets, ₹40 lakh crore in investments are required by 2029. The state’s current GSDP is ₹18.25 lakh crore, with a target of ₹29.29 lakh crore by 2028-29.
Sectoral Share Changes:
In 2014-15:
• Agriculture: 31% (AP), 16% (Telangana)
• Industry: 25% (AP), 22% (Telangana)
• Services: 44% (AP), 61% (Telangana)
In 2023-24:
• Agriculture: 34% (AP), 20% (India), 15% (Telangana)
• Industry: 24% (AP), 26% (India), 18% (Telangana)
• Services: 42% (AP), 54% (India), 67% (Telangana)
Key Concerns and Challenges:
• Loss of Hyderabad: After bifurcation, Telangana retained Hyderabad, which was a major revenue source. Currently, 75% of Telangana’s income is generated from Hyderabad.
• Neglect Under the Previous Government: Between 2019–2024, fiscal mismanagement and neglect caused severe economic setbacks. Growth dropped from an average of 13.49% (2014–2019) to 10.32% (2019–2024).
• Decline in Capital Expenditure: Capital spending fell from 2.01% (2014–2019) to 1.38% (2019–2024).
• Rising Committed Expenditure: In 2023–24, committed expenditure (salaries, pensions, interest) stood at ₹1,03,220 crore, while the state’s own revenue was only ₹93,410 crore—110.6% shortfall.
• Per Capita Income Gap: AP’s per capita income in 2023–24 was ₹2,37,951, while Telangana's stood at ₹3,56,656. Among South Indian states, AP’s per capita income is the lowest.
• Revenue Deficit Worsening: Estimated to grow from ₹1,28,146 crore (2024) to ₹1,43,640 crore (2030–31).
Course Correction in 9 Months:
Since assuming office in 2024, the government has:
• Cleared ₹24,811 crore in pending dues.
• Paid ₹13,085 crore for Central schemes and ₹13,314 crore for capital expenditure.
• Strengthened local bodies with ₹3,339 crore.
• Invested in Amaravati, Polavaram, industrial hubs, and port development.
New Policies Introduced:
19 new policies launched, including:
• Industrial Development
• Food Processing
• MSMEs
• Maritime
• Clean Energy
• Tourism
• Electronics Manufacturing
Clean Energy Vision:
Under the AP Integrated Clean Energy Policy, the state plans to:
• Become a green hydrogen hub.
• Achieve 160 GW renewable power capacity by 2030.
• Attract ₹10 lakh crore in investments.
• Generate 7.5 lakh jobs.
Amaravati Capital Needs:
Development of Amaravati requires ₹77,249 crore. So far, ₹31,000 crore has been secured through World Bank, HUDCO, and KfW. An additional ₹47,000 crore is required.
Key Proposals for Centre Support:
1. Polavaram–Banakacharla linkage
2. Drinking water projects
3. Five tourism hubs (Amaravati, Visakhapatnam, Araku, Tirupati, Rajahmundry), National Museum in Amaravati, World-Class Convention Centre in Visakhapatnam
4. Quantum Valley, skill development, Ratan Tata Innovation Hub, 100% literacy
5. Ports, fishing harbours, multimodal logistics parks, greenfield airports, inland waterways, roads
6. Regional growth centers in Amaravati, Visakhapatnam, Tirupati
Grants Needed:
• For Rural Local Bodies: ₹69,897 crore required; only ₹7,381 crore available.
• For Urban Local Bodies: ₹19,871 crore needed for water, sanitation, roads, transport.
• For Disaster Preparedness (2026–2031): ₹16,181 crore required.
Appeal to Finance Commission:
• Increase the vertical devolution share from 41% to 50%.
• Address decline in horizontal devolution to Southern states—from 24.3% (10th Finance Commission) to 15.8% (15th FC).
• AP’s share in horizontal devolution is below its share in national GDP and population, causing fiscal disadvantage.
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