Andhra capital row: CM Jagan faces heat over Amaravati loans as he bets on Vizag

After storming to power in the state in May 2019, the YSRCP government has mobilised loans amounting to Rs 3,013 crore from various banks through the AP Capital Region Development Authority (APCRDA) for the development of Amaravati as the capital city. Such a loan is mentioned in the “Report of the Comptroller and Auditor General of India on State Finances Audit Report for the year ended 31 March 2020: Report No. 3 of the year 2021”.

The APCRDA was set up by the previous N Chandrababu Naidu-led Telugu Desam Party (TDP) government for development of the proposed Amaravati capital region.

The loans taken through the APCRDA has put the Jagan government at odds with the banks, given his declaration that the capital will be shifted to Visakhapatnam from Amaravati proposed by Chadrababu Naidu. The Opposition parties, including the TDP, Jana Sena, and BJP, are now going after the YSRCP dispensation over the loans.

Dismissing the Opposition’s concerns, YSRCP leader Sajjala Ramakrishna Reddy, advisor to the Jagan government (public affairs), said, “The Centre has agreed that the states have the right to decide on their capital cities. Amaravati will be the legislative capital and the loans and funds received for Amaravati are being used there. Opposition leaders are simply trying to stall the government’s decentralisation plan with vague allegations,” he said.

TDP national spokesperson Kommareddy Pattabhiram however said the YSRCP government raised Rs 3,013 crore bank loans for the capital city of Amaravati which, he charged was “nothing but deliberately misleading the banks”.

As early as in December 2019, CM Jagan made a statement in the Assembly, Pattabhiram said, that “the capital is going to be shifted from Amaravati to Visakhapatnam, which will be henceforth the executive capital of the state”. “Raising loans in the name of Amaravati and then issuing statements that Visakhapatnam would be the capital really puts the government and banks at odds,’’ he added.

These loans have been taken by the state government from several banks including Punjab National Bank, Indian Bank and Union Bank.

“The Centre has given thousands of crore for development of Amaravati, and the present state government has raised loans in the name of Amaravati but is not spending the funds. We reject Chief Minister Jagan Mohan Reddy’s three-capital proposal,’’ BJP AP unit chief Somu Veerraju said.

The central government, as per the provision of Section 94 of the AP Reorganisation Act, has extended a total of Rs 2,500 crore assistance to Andhra for building the capital (Rs 1,500 crore for construction of buildings like Assembly and High Court, and Rs 1,000 crore for development of the Vijayawada and Guntur Municipal Corporations), Veerraju said, adding that another Rs 1,000 crore was released by the Centre for developing smart cities.

BJP Rajya Sabha MP GVL Narasimha Rao said his party prefers that Amaravati should remain the capital. “Vizag may be a good place but it has already been decided to set up the capital at Amaravati and it should remain so. What will happen to Amaravati if the capital is shifted elsewhere?’’ he asked.

The decision on picking a new capital city for Andhra Pradesh in the wake of the state’s bifurcation in 2014 has since gone through several twists and turns on legal, political, legislative and administrative fronts, with the matter now pending in the Supreme Court.