A.P. missed out on ₹38,000 crore in Central grants following 16th FC recommendations, says Minister

Finance Minister Payyavula Keshav revealed that Andhra Pradesh has lost out on a potential ₹38,000 crore in Central grants due to the 16th Finance Commission (FC) recommendations. This missed opportunity would have helped alleviate the state's revenue deficit, which stood at ₹16,000 crore during 2014-19 and is expected to rise to ₹48,000 crore by 2025-26.

During a recent question-and-answer session in the Legislative Assembly, Keshav clarified that the special grants allotted to states across the country were affected by the 16th FC suggestions. The previous Andhra Pradesh government's utilization of nearly ₹50,000 crore in Central grants - including funds from the 15th FC for 2024-25 and 2025-26 that were advanced - compounded the state's financial struggles.

In an effort to address the crisis, the Centre has provided a lifeline to Andhra Pradesh. This includes ₹15,000 crore for the construction of the capital city Amaravati, ₹12,157 crore for the Polavaram project, and 50-year interest-free loans under the SASCI scheme amounting to ₹7,900 crore in 2024-25, ₹8,255 crore in 2025-26, and an estimated ₹3,430 crore so far in the current financial year.

Additionally, the Central government has given conditional approval for the development of Rayalaseema Global Horticulture Hub, with a contribution of ₹10,000 crore beyond Andhra Pradesh's own contribution of ₹30,000 crore.

The Centre has also pledged support for the development of the Visakhapatnam Economic Region, which is envisioned to host 49 projects with an investment of ₹8,00,000 crore, all in Public-Private Partnership (PPP) mode. The state government also benefited from an assistance of nearly ₹4,000 crore from the Government of India's Urban Infrastructure Development Fund.

Meanwhile, the Centre has invested ₹10,300 crore in the Rashtriya Ispat Nigam Limited (RINL) and renegotiated the interest rates on loans taken up by the YSRCP government, which were as high as 13.50%, resulting in annual savings of around ₹1,100 crore. Furthermore, about ₹30,000 crore was spent on reviving 89 Centrally Sponsored Schemes and efforts to recover from the financial turmoil caused by the YSRCP government are expected to be an ongoing process.