Walking with allies: Poll-bound Bihar's Budget demands loom large

If it was Andhra Pradesh last Budget, it's poll-bound Bihar that has now turned to Centre with a list of demands. How the NDA government is delivering on promises

As Finance Minister (FM) Nirmala Sitharaman prepared the National Democratic Alliance’s (NDA’s) first full Budget in July 2024 after forming the government, Andhra Pradesh Chief Minister N Chandrababu Naidu visited the national capital more than once, meeting her, Prime Minister Narendra Modi, and other Union ministers with a list of demands for his state. Seven months later, as the country awaits the FM to present the Union Budget for 2025-26 on February 1, Naidu has left for Davos in Switzerland to attend the World Economic Forum.

 

While Naidu promotes “Brand AP” rather than knocking at the doors of Union ministers, leaders of the ruling Janata Dal (United)-Bharatiya Janata Party (BJP) coalition have submitted their list of demands to the FM, hopeful that she will be generous toward their state in the Budget, especially since Bihar is heading for Assembly polls in October-November. Last month, Bihar’s Deputy CM, who is also its finance minister, Samrat Choudhary, submitted a 32-page memorandum to Sitharaman, seeking the Centre’s assistance for the state’s roads, highways, airports, and power sector.

 

To explain the change in Naidu’s approach, sources in the Telugu Desam Party (TDP) have pointed to how their leader has secured the Centre’s assistance between July 23 last year and February 1 next month.

 

On January 16, with barely a fortnight left before the presentation of the Union Budget, the Cabinet approved a revival package worth Rs 11,440 crore for the Visakhapatnam Steel Plant in Andhra. In a social media post on Friday, Naidu termed it “a historic moment etched in steel”, as the Centre, “in response to the Andhra Pradesh’s consistent efforts since the formation of the NDA government”, approved the financial support to revive the Vizag Steel Plant. 

 

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 the formation of the NDA government in June. He said Modi’s assurance on taxation stability helped Andhra Pradesh secure Google’s investment in Visakhapatnam. The Andhra CM said Google told him 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 the taxation policy.” Naidu also spoke of the PM’s help in the proposal to set up the ArcelorMittal steel plant, facilitating the establishment of a BPCL, and assistance for the construction of Amaravati.

 

Last year, the Opposition had criticised the full Budget for 2024-25 for being “skewed” toward Andhra Pradesh and Bihar while ignoring other states. According to sources, Bihar could still receive support for infrastructure projects in the Budget since it is scheduled for Assembly polls in October-November. However, the Centre and Andhra Pradesh government have since July 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 Pradesh government does not expect the FM to announce anything substantial for the state in the Budget because it might raise the hackles of neighbouring states. Over the past eight months, the state 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 successfully negotiated support from the Centre whenever required to assist these companies. The TDP, however, expects the Centre will continue to deliver on the commitments made in the Andhra Pradesh Reorganisation Act.

 

Sources in the TDP government said help from the Centre had been crucial in Lokesh’s push for the “speed of doing business” and inviting investments into the state. In recent months, the state 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 on January 6. 

 

However, Bihar’s case is different, not only because it is underdeveloped and struggles to attract investments but also since it is going to polls later this year. During his Bihar visit on November 13, the PM had inaugurated and laid foundation stones for projects worth Rs 12,100 crore.

 

In his 32-page memorandum, Bihar Deputy CM Choudhary sought Rs 13,000 crore in aid from the Centre for flood management in North Bihar, upgrading of Darbhanga airport, new airports in Rajgir, Bhagalpur, and funding for Raxaul airport. He asked the Centre to construct 10 new Kendriya Vidyalayas in the state, allow a 1 per cent Gross State Domestic Product rebate for additional borrowing to Bihar, and approve a small modular reactor for nuclear energy, apart from the construction of high-speed corridors.

 

The last Union Budget had allocated Rs 59,000 crore for road connectivity, power, and flood management in Bihar. CM Nitish Kumar had then said he had told the Centre to either give Bihar special category status (SCS) or a special package. “They (the Centrel government) said SCS has been discontinued. So, instead financial assistance should be given for helping Bihar develop. They have now started it,” Kumar had said.