Capital issues, lots of money and a lifeline

The two regions of Andhra Pradesh, Coastal Andhra and Rayalaseema, will be vying for the new capital, which the Centre is to announce shortly. The city that wins the race for the new capital will get  unprecedented funding, a whole new makeover and an international profile and will provide a big boost to the nearby areas. According to the AP Reorganisation Bill, a Central team will identify, within 45 days from the appointed day of the new state, a suitable location for the new capital. Emotions are already high and from their statements, it is evident that the leaders from Coastal Andhra and Rayalaseema are gunning for the capital city to be in their areas.

While the biggest and immediate challenge will be to zero in on the location, it will be a long drawn battle with the Centre to force the latter to make good at least half of its promise to fund generously the building of the new capital. Given the experience of neighbouring Chhattisgarh, Central funding for building a new capital will be a difficult task indeed.

The Centre had promised '10,000 crore. A decade down the line, Raipur has not got more than '500 crore and Chhattisgarh is still struggling to complete the basic structures for its secretariat, Assembly, High Court and other establishments in Naya Raipur. Open drains even in front of the Chief Minister’s residence bear testimony of the sorry state of affairs.

Prime Minister Manmohan Singh’s announcement on a special package has not cut ice with Opposition parties which drew lessons from the Bundelkhand package wherein half of the promised '7,000 crore is yet to be released. Doubts are being expressed over completing a new capital in 10 years, the period that Hyderabad will be the common capital for the two states.

Visakhapatnam and the Vijayawada-Guntur corridor are in the forefront in the race for the capital while there is an emotional demand from Rayalaseema to locate the capital in either of its four districts as the local leaders argue that the region had earlier sacrificed the then capital Kurnool at the time of merger of the region with the state of Hyderabad, when Hyderabad was made the capital of Andhra Pradesh. Industrialists and investors, however, are appealing to political parties not to complicate issues on the new capital and vitiate the atmosphere further. “Andhra Pradesh will find it difficult to achieve economic sustainability unless it makes rapid strides in industrialisation in the next five years,” says Mr Anil Yendluri, chief executive officer of Krishnapatnam Port.

According to industrialists, the state will lose heavily in terms of revenue after losing Hyderabad to Telangana and the tussle over the capital will lead to waste of more time in building the new state. “The political instability in the last five years has already cost us dearly,” says Mr Ravindra Sannareddy, managing director of Sri City, the fast growing SEZ on the Nellore-Chittoor border. Multinational companies are wary of investing because of the possible delays for approvals in the backdrop of the state’s bifurcation apart from fear over the impact of agitation on the day-to-day operations, he said. There is huge potential for the long coastline and the entrepreneurship skills of a few sections of society that need to be tapped.

Industrialists want the new government to implement a few projects on priority like the petrochemical zone, eight-lane expressway covering all coastal districts, Kakinada SEZ and international airport. They are looking at a pro-active government, extending the financial package for 10 years and radical land acquisition policy involving the owners in the project in some way or the other since land is very precious in the coastal districts.

Another major challenge Andhra Pradesh will face is in the irrigation sector. It is a predominantly agrarian economy in the absence of industrialisation but at the same time it will have difficulties in catering to irrigation needs being a lower riparian state.

With inputs from Pathri Rajasekhar (Nellore) and S.N.V. Sudheer (Visakhapatnam)