In a significant clarification aimed at dispelling public apprehensions, Andhra Pradesh's Municipal Administration and Urban Development Minister, P Narayana, has categorically stated that the ambitious Amaravati capital city project is entirely self-financed and does not impose any additional debt burden on the state. The minister, in an exclusive interview, outlined the unique financial model underpinning the city's development, assuring citizens that there is no cause for worry regarding loans taken for its construction.
A Self-Sustaining Financial Model
Minister Narayana emphasized that the development of Amaravati is fundamentally different from conventional capital city projects. The model is built on three core pillars: the Land Pooling Scheme (LPS), value capture financing, and phased infrastructure creation. This approach ensures the city's growth finances itself, moving away from heavy reliance on the state treasury.
"Let me make this very clear: Amaravati is a fully self-financed capital city project. There is absolutely no need for people to worry about debts," Narayana stated. He explained that any borrowings are securely backed by strong assets, appreciating land values, and future revenue streams, not by imprudent expenditure.
Providing concrete figures, the minister highlighted the financial upside. He noted that a plot of 1,250 square yards, currently valued at approximately Rs 3 crore, is expected to fetch up to Rs 5 crore after infrastructure development. This appreciation is projected to enable the government to generate between Rs 80,000 crore to one lakh crore from the sale of its land bank. This substantial revenue will be sufficient to repay all project-related debts, with the interest being serviced through income generated by the Capital Region Development Authority (CRDA) from permissions and development plans.
Momentum in Development and Future Vision
Narayana reported that project works have gained significant momentum following the formation of the NDA government at the centre. Core infrastructure projects, including trunk roads, flood mitigation systems, underground utilities, and housing for government employees, are progressing rapidly. Iconic structures like the new secretariat and high court are being developed in a phased manner to ensure foundational works are completed first for seamless subsequent development.
Looking ahead, the minister unveiled ambitious plans for the second phase of the Land Pooling Scheme. This strategic expansion will focus on developing an international airport and a world-class sports city. He described these not as symbolic gestures but as vital economic catalysts designed to boost tourism, create employment, and enhance global connectivity. The international airport will link Amaravati directly to major global hubs, while the sports city aims to position the capital as a centre for international sporting events and training academies.
Benefits for Farmers and Sustainable Planning
Reiterating Chief Minister Nara Chandrababu Naidu's vision, Narayana assured that farmers are considered partners in Amaravati's development. Under the second phase of LPS, landowners will receive developed plots with significantly higher market value than their original agricultural land. They will also gain from improved infrastructure and new economic opportunities, mirroring the positive outcomes witnessed in the first phase.
On sustainability, the minister asserted that future-ready urban planning is embedded in Amaravati's DNA. The master plan incorporates extensive green spaces, water-sensitive design, renewable energy integration, and smart mobility solutions. The city is being built with climate resilience and environmental protection as integral components, aiming to serve the state for the next 50 to 100 years.
In his closing message to investors and citizens, Minister P Narayana urged for confidence and patience. He affirmed that Amaravati is financially sound, professionally planned, and robustly supported, poised to emerge as the growth engine of Andhra Pradesh and a symbol of the state's aspirations and capabilities.
