Explained: Why TDP does not expect much for Andhra Pradesh from Budget

With barely a fortnight left for the presentation of the Union Budget, Thursday’s meeting of the Union Cabinet approved a revival package worth Rs 11,440 crore for the Visakhapatnam Steel Plant in Andhra Pradesh.

 

The move exemplifies how the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government at the Centre has addressed the demands and concerns of its key allies, such as the Telugu Desam Party (TDP), which rules Andhra Pradesh, and the Janata Dal (United) [JDU], which runs a coalition government with the BJP in Bihar, outside of the Budget proposals.

 

Last year, the Opposition had criticised the full Budget for 2024-25, presented by Finance Minister Nirmala Sitharaman on July 23, 2024, for being “skewed” towards Andhra Pradesh and Bihar while ignoring other states. It is something that the Centre is unlikely to repeat in this year’s Budget, sources in the TDP, JDU, and BJP have told Business Standard.

 

According to these sources, Bihar could still get support for infrastructure projects in the Budget for 2025-26 since it is scheduled for Assembly polls in October-November this year. However, the Centre and Andhra Pradesh government, led by Chief Minister N Chandrababu Naidu, have over the last eight months struck an understanding where the latter is satisfied that its concerns and demands have been addressed outside the Budget proposals.

 

According to TDP sources, the Andhra government does not expect Finance Minister Sitharaman to announce anything substantial in the Budget because it might raise the hackles of neighbouring states. Over the last eight months, the Andhra government has focused on what its minister Nara Lokesh describes as its “speed of doing business.”

 

It has finalised several investment proposals in the last eight months and has successfully negotiated support from the Centre, whenever required, to assist these companies. The TDP, however, expects that the Centre will continue to deliver on the commitments made in the Andhra Pradesh Reorganisation Act.

 

On Friday, after Union Minister Ashwini Vaishnaw announced the decision taken in the previous day’s Union Cabinet meeting about the Vizag Steel Plant, Prime Minister Narendra Modi and Andhra Pradesh Chief Minister N Chandrababu Naidu took to social media to underline the importance of the decision.

 

Naidu termed it “a historic moment etched in steel” as the Centre, “in response to the Andhra Pradesh government’s consistent efforts since the formation of the NDA government,” approved the financial support to revive the Vizag Steel Plant. He thanked the PM, Finance Minister Sitharaman, and Union Steel Minister H D Kumaraswamy. In his social media post, the PM said that the Vizag Steel Plant has “a special place in the hearts and minds of the people of Andhra Pradesh.”

 

Earlier this month, on January 8, the PM travelled to Andhra Pradesh, his first visit to the state since June, where he laid foundation stones and inaugurated development works worth over Rs 2 trillion in Visakhapatnam.

 

In his speech at the event, Naidu listed instances of how the PM has been helping Andhra Pradesh since June. He said Modi’s assurance on taxation stability helped Andhra secure Google’s investment in Visakhapatnam.

 

The Andhra CM said Google told him that they were willing to invest, but “if your government enhances tax in the future, how are we going to face it?” Naidu said he raised the issue with the PM, “and he assured me that there was no question of changing taxation policy.”

 

Naidu also spoke of the PM’s help in the proposal to set up the ArcelorMittal steel plant. “When I went to the PM, I explained to him—‘Sir, they want a pipeline. They wanted to get iron ore through slurry.' Immediately, he (PM) made it a point that ‘if you want to carry iron ore—there will be a lot of pollution. With slurry, you convert it and send it through a pipeline. That is the best way for the environment and cost of transport.’”

 

The Andhra CM also acknowledged the Centre’s help for building Amaravati and facilitating the establishment of a BPCL refinery in Ramayapatnam, an economically backward area.

 

According to sources in the TDP government, the help from the Centre has been crucial in Lokesh's push for the "speed of doing business" and inviting investments into the state. In recent months, the state government has ensured that four projects worth Rs 71,400 crore were sealed, with land identified and allocated within 40 to 70 days from the date of proposal to the issuance of the government order (GO) on January 6.

 

These projects include one with Reliance Industries Limited worth Rs 65,000 crore for the setting up of 500 compressed biogas plants. The date of proposal was November 26, and the date of the GO was January 6, that is, 41 days, Andhra government sources said. Another project with Tata Power Renewable Energy Limited to set up a 400 MW solar project worth Rs 2,000 crore took 77 days, including land allotment and grid connectivity.

 

In the 2024 Lok Sabha polls, results for which were announced on June 4, the BJP secured 240 seats, falling short of the majority mark. It formed the government with its pre-poll allies, the TDP, which won 16 seats, and the JDU, which won 12 seats. The FM presented the full Budget for 2024-25 on July 23.

 

Opposition MPs, especially those from Uttar Pradesh, West Bengal, and southern states, accused the government of ignoring their states in the Budget since the BJP had performed below par in these states. The FM dismissed the criticism, pointing out instances from the UPA-era Budgets that either did not mention or failed to announce projects for several states. However, sources say the criticism hit home, and the government and its allies came to an understanding that they should expect support from the Centre outside of the Budget.

 

In the 2024-25 Budget, Sitharaman announced a total outlay of nearly Rs 59,000 crore for Bihar, including funding for three expressways, a power plant, heritage corridors, new airports, sports infrastructure, and funds for flood mitigation. For Andhra Pradesh, the FM said the government would fulfil the commitments in the Andhra Pradesh Reorganisation Act, including facilitating special financial support for Amaravati and the Polavaram Irrigation Project. She also announced assistance for infrastructure and connectivity projects.