On the eve of Finance Minister Nirmala Sitharaman's record seventh budget, Andhra Pradesh expected a heavy financial package from the Centre. Chief Minister Chandrababu Naidu himself made multiple representations, even asking for assistance to the tune of ₹1 lakh crore.
On Tuesday, Sitharaman announced ₹15,000 crore "financial support" for the state—money that would supposedly be borrowed from multilateral agencies.
"Recognising Andhra Pradesh's need for capital, we will arrange for financial support," said the FM in her budget speech lasting an hour and 25 minutes, "In the current financial year, ₹15,000 crore will be arranged with additional amounts for future years."
She added: "Our government is also fully committed to financing the early completion of the Polavaram project, which is the lifeline of Andhra Pradesh and its farmers. This will facilitate our country's food security as well."
Sitharaman said under the Andhra Pradesh Reorgnization Act, the Centre would provide funding for infrastructure, water, power, railways and roads, and grants to backward regions like Rayalaseema, Prakasam and North Coastal Andhra Pradesh.
The move to facilitate borrowing and a mere offer of support—as opposed to an outright grant of funding—for Amaravati has left the industry disappointed.
"The citizens of Andhra Pradesh would be disappointed because Amaravati is the most prestigious project of the state," said Neeraj Sarda, Deputy MD at Sarda Metals And Alloys.
"Andhra's people were expecting a grant to build the capital, but has come through financial assistance," he added.
"There is a slight disappointment for us, but from what I understand, the ₹15,000 crore is for the first year, and there will be more benefits to support the capital."
The industry's hopes now pine on there being further funding announcements for Amaravati. "It is a yearly budget and state capitals aren't built in one year," said RVS Rudraraju, Chairman at CHI Clasil.
"I don't think the fiscal support announcement is a bad move, but a grant would have been better than a loan through multilateral borrowing."
Industry body CII is choosing to count the positives. "We are slightly disappointed because of our expectations," said Grandhi Rajesh, Chairman, CII Vizag, "But the very mention of the AP Reorganization and funds for the new AP capital is a welcome step - the (Reorgnization) Act lost its life in the last 10 years, but has now come back to life. He added: "There are also five years to go; we can fulfill our dreams of ₹1 lakh crore funding for Amaravati."
Aside from fiscal support, the FM's move to grant funds to infrastructure, power and transport in the state, in addition to announcing the resumption of work on the Vizag-Chennai Industrial Corridor is being seen as a big positive for the state's industry.
In a move that could boost the seafood export business from the state, Sitharaman also announced a cut on customs duty on fish feed and shrimp-feed.