FM unveils targeted economic stimulus for Bihar and Andhra Pradesh

23 Jul 2024 , 12:36 PM

In line with coalition politics and the primary requests of NDA partners TDP and JD(U), finance minister Nirmala Sitharaman offered a special package for Bihar and Andhra Pradesh.

The FM announced ₹15,000 Crore for Andhra Pradesh’s new capital during her Budget speech.  She noted that the government is dedicated to financing and finishing the Pollavaram irrigation project, which is regarded as a lifeline for Andhra Pradesh and its farmers. Additional funds will be made available this year to assist capital investment for economic growth.

Similarly, Nirmala Sitharaman remarked that the Bihar government’s request for foreign help from multilateral development banks would be accelerated. Sitharaman promised various development projects for Bihar shortly after the Centre rejected any plans to grant the state Special Category Status, a long-standing demand of the JDU.

In the days running up to the Union Budget, the government signalled that it is favourably inclined towards AP and Bihar (Modi 3.0 allies) who are requesting a special deal. BJP members claimed the party leadership is trying to maintain stability in the coalition and smooth relations with the allies.

The stability of the BJP-led NDA government depends on backing from its partners, the TDP and the JDU, which together have 28 legislators in the Lok Sabha.

The announcement comes just a day after the Centre rejected the JD(U)’s proposal for ‘special category’ status for Bihar in an all-party meeting. Currently, no new states are being granted ‘special category’ status because the Indian Constitution does not allow for such classification.

Allocation for roads, motorways, power projects, and other infrastructure projects in Andhra Pradesh (₹15,000 Crore for current year and planned allocation for future years) and Bihar (₹26,000 Crore for road projects and ₹21,000 Crore for power projects) is positive for South-based construction players like NCC, KNR Constructions, as well as other prominent infra EPC players like L&T and PNC Infratech Bharat Gianani.

The FM advocated financing the creation of corridors at Vishnupad Temple and Mahabodhi Temple, similar to the Kashi Vishwanath Temple.

Additionally, the government would support the development of Nalanda in Bihar as a tourism destination. Finance Minister Sitharaman also stated that an economic policy framework will be implemented to usher in next-generation reforms aimed at accelerating economic growth. Furthermore, the government will aid Odisha in developing tourism, as expressed by the FM in Lok Sabha.

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