Andhra Pradesh, Bihar package likely to cost Rs 20-30K crore to Centre

While Andhra Pradesh is expected to receive Rs 15,000-20,000 crore, Bihar is likely to receive Rs 5,000-10,000 crore in FY25

The Centre’s financial package for Andhra Pradesh and Bihar may cost the exchequer around Rs 20,000-30,000 crore in 2024-25, according to government sources. While Andhra Pradesh is expected to receive Rs 15,000-20,000 crore, Bihar is likely to get Rs 5,000-10,000 crore in FY25.

A major chunk of the allocations has been made under the “Special Assistance under the demand – Transfers to States” head, which has been raised fivefold to Rs 20,000 crore in the full Budget for FY25 compared to Rs 4,000 crore allocated in the Interim Budget.
 

The Telugu Desam Party in Andhra Pradesh and the Janata Dal (U) in Bihar are considered key allies for the stability of the National Democratic Alliance government at the Centre.

 These two parties have 28 members of Parliament. Both have lobbied for special financial packages from the Centre for their states in pre-Budget meetings with Union ministers.

 

In a white paper released on Friday, Andhra Pradesh Chief Minister N Chandrababu Naidu said the state needs an additional Rs 19,107 crore to meet its essential committed expenditure for FY25.
 

In her Budget speech, Finance Minister Nirmala Sitharaman mentioned Andhra Pradesh and Bihar five times each. For Andhra Pradesh, Sitharaman said the government would facilitate special financial support through multilateral development agencies and arrange Rs 15,000 crore in FY25, with additional amounts in future years. However, this would not have any fiscal implications for the Centre in FY25.
 

“Our government is fully committed to financing and early completion of the Polavaram Irrigation Project, which is the lifeline for Andhra Pradesh and its farmers. This will facilitate our country’s food security as well,” the finance minister said.
 

Under the Andhra Pradesh Reorganization Act, the Budget also promised to provide funds for promoting industrial development, such as water, power, railways, and roads in the Kopparthy node on the Visakhapatnam-Chennai Industrial Corridor and Orvakal node on the Hyderabad-Bengaluru Industrial Corridor. An additional allocation will be provided this year towards capital investment for economic growth, Sitharaman said in her speech.
 

Sitharaman announced a cumulative package of Rs 58,900 crore for Bihar, apart from promising to expedite requests for external assistance from multilateral development banks, along with plans for new airports, medical colleges, and sports infrastructure

The Budget has earmarked Rs 26,000 crore for highways in Bihar, including the Patna-Purnia, Buxar-Bhagalpur, and Bodhgaya-Rajgir-Vaishali-Darbhanga Expressway, along with a new two-lane bridge over the Ganga in Buxar.

Power projects, including the setting up of a new 2400 megawatt power plant at Pirpainti, have been announced at a cost of Rs 21,400 crore. As part of the irrigation and flood mitigation programme, such as the Kosi-Mechi intra-state link, Bihar has been promised financial support for projects with an estimated cost of Rs 11,500 crore.