Major Boost for Andhra Pradesh: ₹5,000 Crore Allocated for Visakhapatnam Economic Region
The Union Budget 2026 has unveiled a substantial financial commitment to Andhra Pradesh's development, with a ₹5,000-crore allocation specifically earmarked for the Visakhapatnam Economic Region (VER) over the next five years. This significant investment represents a strategic move to accelerate economic growth in coastal Andhra Pradesh through targeted infrastructure and sectoral development.
Funding Mechanism and Implementation Strategy
The allocated funds will be deployed through an innovative challenge mode with a reform-cum-results-based financing mechanism, ensuring that financial support is directly linked to the implementation of comprehensive city plans and measurable outcomes. This approach emphasizes accountability and performance-driven development, moving beyond traditional funding models to create sustainable economic transformation.
Scope and Vision of Visakhapatnam Economic Region
Covering nine districts from Srikakulam to Konaseema, the VER has been strategically selected under NITI Aayog's National Growth Hub initiative, positioning it as a key driver of regional economic expansion. A recent detailed report by the policy think tank has outlined an ambitious pathway to transform VER into a $125–135 billion economy by FY32, representing substantial growth potential for the region.
The development plan places special emphasis on Visakhapatnam city, with visionary proposals including:
- Development of a Bay City between Kailasagiri and Bheemili
- Vizag 2.0 expansion extending up to the upcoming Bhogapuram airport
- Aerocity project development around the greenfield airport
- Comprehensive development across all nine districts within the region
Economic Impact and Sectoral Focus
This initiative aims to develop the Vizag region into a formidable economic powerhouse, contributing significantly to Andhra Pradesh's ambitious $2.4 trillion economic target. Key sectors identified for focused development include:
- Port-led trade and logistics infrastructure
- IT hubs and innovation centers
- Agriculture and allied industries
- Tourism and hospitality sector
- Healthcare facilities and medical infrastructure
- Transport networks and connectivity projects
Additional Tourism and Ecological Initiatives
Beyond the core economic development, the Budget also proposed significant tourism infrastructure improvements, with Finance Minister Nirmala Sitharaman announcing ecologically sustainable mountain trails across India, including specific development in the Eastern Ghats region. For Araku Valley, this includes:
- Diverse trekking facilities ranging from coffee plantation walks
- Challenging steep ridge trails like Raktakonda
- Village-to-village routes around Paderu–Dumbriguda
Additionally, bird-watching trails were announced along Pulicat Lake spanning both Andhra Pradesh and Tamil Nadu. On the Andhra side, the Pulicat sanctuary in Nellore district will feature:
- Wetland and lagoon exploration trails
- Routes near Sullurupeta offering exceptional waterbird sightings
- Trails along the Pulicat–Sriharikota causeway
These tourism initiatives complement the broader economic development goals by enhancing the region's appeal to visitors while promoting ecological sustainability and conservation awareness.
