Political consolidation, rather than fiscal consolidation, appears to be the objective of the Union Budget for 2024-25, the first since the NDA was voted to power for a third term.
Bihar and Andhra Pradesh, ruled by the key allies whose support is crucial for the stability and longevity of the central government, got special treatment in terms of funds allocation.
Nitish Kumar and Chandrababu Naidu must be mighty pleased with the liberal assistance announced by the Union Finance Minister Nirmala Sitharaman who presented her seventh consecutive budget in the Parliament on Tuesday.
Unlike in the past two terms, the NDA government is now dependent on both the Janata Dal (United) and the Telugu Desam Party for survival. The two parties together have 28 MPs in their kitty. In a clear move to please them, the Centre has opened its purse strings for Bihar and AP, while ignoring some of the long-pending needs of other states. This move exposes the Centre to the charge of political favouritism.
Effectively, Bihar will be getting Rs 37,500 crore in special funds allocated for multiple infrastructure projects across districts and flood mitigation plans, while there will be additional funds for the development of tourism and cultural circuits around Rajgir and Nalanda in the state.
The Centre will release Rs 15,000 crore in the current financial year as special assistance for the industrial and infrastructural development of Amaravati, the new capital of AP.
Apart from this specific fund, the central government will also release additional financial assistance through multilateral development agencies. Grants for backward regions of Rayalaseema and north coastal Andhra were also part of the package.
“It is ironic that while the Union Finance Ministry has worked around the Andhra Pradesh Reorganisation Act to allocate special funds to AP, it has ignored the unfulfilled promises for Telangana under the same legislation,” a senior leader of the Bharat Rashtra Samithi (BRS) said.
The needs of Telangana, the country’s youngest state, were not even mentioned in the budget, the former minister K T Rama Rao lamented.
“Though numerous requests were made to the central government in the past to support Telangana and fulfil over 35 promises made to the state under the Reorganisation Act, there has been no response in the last ten years,” he pointed out.
None of the promises made to Telangana— steel plant at Bayyaram, railway coach factory at Kazipet, national status for Palamuru-Rangareddy Lift Irrigation Scheme, Tribal University at Mulugu—was fulfilled. Despite recommendations by the NITI Aayog, the Centre has been deliberately ignoring the need for extending financial support for schemes in Telangana.
“If one was expecting the budget to set the tone for upholding the federal spirit in the coming years, the Finance Minister’s presentation has come as a disappointment,” political analyst Srisail Reddy said.
Amaravati in ‘Amrit Kaal’
Under the Andhra Pradesh Reorganisation Act, which was introduced in 2014, the Narendra Modi government has now recognised Amravati as the capital of Andhra Pradesh. The act formally bifurcated Andhra Pradesh into two states — Telangana and the residuary Andhra Pradesh — effective from June 2, 2014.
Hyderabad was then designated as the shared capital for both states for a period of up to 10 years. During this period, Andhra Pradesh would develop its own capital, which later became Amaravati. In 2024, the government finally and formally identified Amravati as the state capital.
“We will build Amravati in ‘Amrit Kaal’. We will make it one of the best state capitals in the country. We are grateful to the Modi government for supporting us in realising our dream,” a senior TDP leader said.
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