Nirmala Sitharaman said that the government is ensuring all efforts to fulfil the commitments in the Andhra Pradesh Reorganisation Act, and the developmental needs of the state’s new capital.

“Andhra Pradesh Reorganisation Act- Our govt has made efforts to fulfil the commitments in Andhra Pradesh Reorganisation Act. Recognising the state’s need for capital, we will facilitate special financial support through multilateral agencies. In the current FY, ₹15,000 crore will be arranged with additional amounts in future years,” the finance minister said.

On providing funds for the development of essential infrastructure in the state, Sitharaman said, “Under the Andhra Pradesh Reorganisation Act, for promoting industrial development, funds will be provided for essential infrastructure such as water, power, railways and roads.”

Sitharaman also acknowledged the need for giving grants to backward regions in the state as stated in the Andhra Pradesh Reorganisation Act. “Grants for backward regions of Rayalseema, Prakasam, and North Coastal Andhra as stated in the Act will be provided,” she said.

The announcement by Nirmala Sitharaman meets the demand of the Andhra Pradesh government, led by NDA ally TDP, which sought ₹15,000 crore in funds to develop Amaravati as the new capital of the state.

The Telugu Desam Party (TDP) emerged as one of the most important allies for the National Democratic Alliance in the Lok Sabha election 2024, where it was elected into power for the third time.

After the state was bifurcated into two – Andhra Pradesh and Telangana – in 2014, Hyderabad was designated as the common capital for both the states for 10 years under the Andhra Pradesh Reorganisation Act, 2014. Hyderabad ceased to be the capital city of Andhra Pradesh on June 2 this year.