To
Smt Nirmala Sitharaman
Union Finance Minister
Dear Smt Sitharaman,
I refer to the following portions of your latest Budget speech on Andhra Pradesh.
“Andhra Pradesh Reorganization Act
Our government has made concerted efforts to fulfil the commitments in the Andhra Pradesh Reorganization Act. Recognizing the state’s need for a capital, we 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. ……….Grants for backward regions of Rayalaseema, Prakasam and North Coastal Andhra, as stated in the Act, will also be provided”
The relevant portions of the Andhra Pradesh Reorganisation Act,2014 (APRA). are as follows:
“Section 46;
(2) Notwithstanding anything in sub-section (1), the Central Government may, having regard to the resources available to the successor State of Andhra Pradesh, make appropriate grants and also ensure that adequate benefits and incentives in the form of special development package are given to the backward areas of that State.
(3)The Central Government shall, while considering the special development package for the successor State of Andhra Pradesh, provide adequate incentives, in particular for Rayalaseema and north coastal regions of that State”
There are seven backward districts identified by Niti Ayog and they are Anantapur, Chittoor, Cuddapah, Kurnool, Srikakulam, Visakhapatnam and Vizianagaram in Rayalaseema and north coastal region of Andhra Pradesh, based on Niti Ayog’s recommendations as indicated in a reply given by the Ministry of Home Affairs in response to Lok Sabha Starred Question No. 203 on 9.3.2021.
It is not clear from your Budget statement as to why you have included Prakasam among the backward areas, why you have not instead indicated the seven backward districts of north Andhra and Rayalaseema and why you have chosen not to indicate a specific amount of assistance for the already notified seven backward districts..
According to an indication given by the State’s Municipal Administration Minister recently, the total cost of expenditure on Amaravati may exceed Rs 50,000 crores and the project will be implemented in the next 30 months. Out of it, according to your Budget announcement, Rs 15,000 crores will come from multilateral financing institutions with the rest to be raised by the State as loan assistance from other sources. Whether it is an external loan from multilateral financing institutions or loans from domestic financing institutions, their repayment has to be made by the State from its revenue resources and the funds transferred by your Ministry as per the Finance Commission’s recommendations.
Spending as much as Rs 50,000 crores on Amaravati located entirely in Guntur district would evidently cut into the State’s spending in other regions, especially in north Andhra and Rayalaseema regions which are socio-economically less developed.
In order to ensure equity and balance in terms of regional development, I have separately requested the State government to find resources for spending in north Andhra and Rayalaseema, especially in the seven backward districts.
As committed in the Budget announcement, I request the Finance Ministry to consult Niti Ayog urgently, work out a special package of financial assistance for north Andhra and Rayalaseema regions, including the seven already recognised backward districts.
I hope that action will be taken at the earliest.
Regards,
Yours sincerely,
E A S Sarma
Former Secretary to the Government of India
Visakhapatnam
