Acute paucity of funds may pose a big challenge to Andhra Pradesh chief minister N Chandrababu Naidu’s grand plans of developing three mega cities and 14 smart cities in the state.
After bifurcation, AP began its journey with a deficit of Rs 16,500 crore. And to convert his mega plans into reality, the government needs to pump in more than Rs 10 lakh crore. Ironically two days ago, Naidu wrote to Union finance minister Arun Jaitley, expressing his government’s inability to repay Rs 10,500 crore loans taken from the Centre and requested him to consider waiving the debt.
Where’s the money?
* Building a new capital alone requires an estimated Rs 1.35 lakh crore
* Each smart city would need over Rs 40,000 crore just to have the required infrastructure
* The 128 projects announced by the CM would require over Rs 7 lakh crore
* Two days ago, Naidu wrote to the Centre expressing his government’s inability to repay Rs 10,500 crore loans and requested a waiver
Land pooling to prove tough
According to an initial proposal, the government is ready to give about 24% of the acquired land to the actual owner. For instance, if the government acquired one acre (100 cents) from a farmer, 40 cents would be spared for roads, drains and community spaces. Of the remaining 60 cents, the farmer and the government would take a share of 40:60, which accounts for 24 cents for the farmer. The government would get 36 cents from each acre acquired from the farmers.
This means that the government would be required to acquire three times the actual land required for the capital. Suppose the government plans to have the capital in about 20,000 acres, it would have to acquire about 60,000 acres. In fact, Naidu has been dreaming about having a capital city of 50,000 acres and land pooling for such a massive capital may face hurdles.