In a significant assertion aimed at dispelling public concerns, 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. In an exclusive interview, the minister outlined the robust financial model and provided updates on the ongoing development works valued at over Rs 60,000 crore.
A Self-Sustaining Financial Model for a 100-Year Vision
Minister Narayana emphasized that the development of Amaravati is fundamentally different from traditional capital city projects. He credited Chief Minister Nara Chandrababu Naidu with envisioning the city for the next 100 years, not just a few decades. The financial backbone of this vision is a combination of the Land Pooling Scheme (LPS), value capture financing, and phased infrastructure creation.
"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 unlike projects reliant on state funds, Amaravati's growth is designed to finance itself. Borrowings are secured against strong assets, appreciating land values, and future revenues.
He provided a concrete example: a plot of 1,250 square yards, currently valued at approximately Rs 3 crore, is expected to fetch up to Rs 5 crore post-infrastructure development. This appreciation is projected to help the government generate between Rs 80,000 crore to one lakh crore from the sale of its land bank, funds sufficient to repay all project-related debts. Additionally, interest payments will be serviced through income generated by the Capital Region Development Authority (CRDA) from permissions and development plans.
Phase 2 Expansion: Airport, Sports City and Farmer Benefits
Building on the success of the initial Land Pooling Scheme, the government is strategically planning a second phase. This phase is set to include landmark projects that will elevate Amaravati's global stature.
"We plan to develop key projects such as an international airport and a world-class sports city in the second phase," Narayana revealed. He described these as economic catalysts, not mere symbols. The international airport aims to connect Amaravati directly to major global hubs, facilitating investment and tourism. The sports city is envisioned to position the capital as a destination for international sporting events, training academies, and related tourism.
The minister reassured that farmers participating in the second phase of LPS would be partners in progress. Land contributors will receive developed plots with significantly higher market value than their original agricultural land, alongside improved infrastructure and new employment opportunities.
Current Progress and Future-Ready Planning
Narayana reported that project works have gained considerable momentum. Core infrastructure projects are advancing rapidly, including trunk roads, flood mitigation systems, underground utilities, and housing for government employees. Iconic structures like the new secretariat and high court are being developed in a phased manner.
To ensure timely completion, the government has implemented strict project management with clear milestones and accountability. The city's master plan embeds sustainability principles, featuring extensive green spaces, water-sensitive urban design, renewable energy integration, and smart mobility solutions, aiming for climate resilience for the next 50-100 years.
Concluding with a message to citizens and investors, Minister Narayana urged for "confidence and patience," affirming that Amaravati is financially sound, professionally planned, and politically supported. He expressed confidence that the capital would emerge as the growth engine of Andhra Pradesh, attracting smart industries and symbolizing the state's aspirations.
