‘Amaravati loans exempt from AP debt limits’

The loans secured from the World Bank and the Asian Development Bank (ADB) for the development of Amaravati will not be counted under Andhra Pradesh’s Fiscal Responsibility and Budget Management (FRBM) limits, Union Minister of State for Finance Pankaj Chaudhary has clarified.
In a written response to a question raised by a YSR Congress Party member in the Lok Sabha on Monday, the minister explained that borrowings from these international financial institutions for Amaravati’s infrastructure projects would not be considered part of the state’s debt. He further stated that a special assistance grant of `2,500 crore had been sanctioned to address urgent infrastructure needs in the region.
Chaudhary outlined that the World Bank and ADB had approved loans totaling `6,700 crore for the Amaravati Integrated Urban Development Program and the Sustainable Capital City Development Program. The World Bank loan became effective on January 22, while the ADB loan came into effect on February 10. However, he noted that the funds were yet to be disbursed.
The minister also highlighted that a maximum of `1,500 crore would be provided as special assistance or grants to Andhra Pradesh, capped at 10% of the overall project cost. He emphasized that the utilization of funds would be strictly monitored according to the conditions laid out at the time of loan approval.
The clarification assumes significance in the wake of ongoing discussions regarding the state’s financial commitments and the feasibility of continuing Amaravati’s development amid fiscal constraints. With the exemption of these loans from the FRBM limits, Andhra Pradesh is expected to have greater financial flexibility in executing its capital city projects.