The grand announcement made by Union finance minister Nirmala Sitaraman to facilitate special financial support of Rs 15,000 crore for the capital city of Andhra Pradesh has kicked up a debate, whether it was a loan or a grant from the Centre.
The finance minister said recognizing the state’s need for a capital, the Centre will facilitate special financial support through multilateral development agencies.
“In the current financial year Rs 15,000 crore will be arranged, with additional amounts in future years,” she said.
Nirmala has not given any clarity on whether it is a loan or financial assistance. But the way she said the money would be “arranged” through multilateral development agencies, rather than allocated in the budget has given rise to the talk that it could be a loan, but not a grant.
A TDP leader said there is no mention of the mode of assistance to the state for building Amaravati, but her statement indicates that the Centre would stand guarantee to the long-term lending by multilateral development agencies like World Bank, Asian Development Bank and financial institutions.
Another TDP leader said since the Centre itself was facilitating the loan, the onus of repayment of loan, if it is a loan, would be on the Centre.
“Or, the centre might absorb part of the loan,” he said.
The TDP leader, however, said getting Rs 15,000 crore in the first year, whether in the form of loan, or assistance, itself is a good beginning and will help kickstarting the economic activity in the capital.
Amaravati capital city project, initiated by TDP president and chief minister N Chandrababu Naidu in 2015, was abandoned by the previous YSR Congress party government in 2019, after an amount of more than Rs 9,000 crore was spent on various works.
The Centre had sanctioned Rs 2,500 crore as grant for the capital city of works, of which Rs 1,500 crore was released. The balance amount of Rs 1,000 crore got lapsed due to change of government in the state in 2019.
