Three’s a crowd?

The dispute around Amaravati versus 3 capitals for Andhra Pradesh rages even after the High Court verdict

The proposed three capitals for Andhra Pradesh continue to be in a limbo due to the protracted litigation in the High Court and the spirited battle being waged outside by thousands of farmers who gave up their fertile lands for the development of Amaravati as a single capital city.

The High Court said on March 3, 2022, that the State should develop Amaravati as the capital of Andhra Pradesh, consequent to its lack of legislative competence to change or trifurcate the capital.

In response, the State government filed a petition earlier this month, requesting that it be given five years’ time, citing the difficulty in accomplishing the task in a short time (one month for infrastructure creation and six months for construction and development Amaravati from the date of judgement) and the severe financial constraints it is grappling with since bifurcation.

Meanwhile, the State government claimed to have resumed the works which were suspended soon after the YSR Congress came to power in May 2019 and said it is in the process of raising loans from banks.

Here lies a big problem: banks have made it clear that only a consortium of banks (a single bank cannot lend huge sums) can provide the credit required by the government.

A bigger hurdle is the stipulation by the banks that the “revenue stream of the borrower (the government) should be reflected in the financial model” and “any budgetary support for servicing repayment obligations will not be considered”.

These conditions have essentially tied the government in knots as complying with those procedures and obtaining final approvals from the lending institutions is itself a time-taking process and the government had to struggle to bridge the revenue deficit that is widening over the years.