Chandrababu Naidu and Nitish Kumar Seek $6 Billion for State Development Ahead of Budget Presentation
News Mania Desk/Agnibeena Ghosh/8th July 2024
Chandrababu Naidu and Nitish Kumar have requested approximately ₹50,000 crore ($6 billion) from the upcoming budget, set to be presented by Finance Minister Nirmala Sitharaman on July 23, according to a Reuters report.
In the recent Lok Sabha election, the Bharatiya Janata Party (BJP) secured 240 seats, falling short of the 272 seats needed for a majority. The National Democratic Alliance (NDA) government was formed with significant support from major allies, including Chandrababu Naidu’s Telugu Desam Party (TDP) and Nitish Kumar’s Janata Dal (United), which together won 28 seats.
The states led by Naidu and Kumar are seeking an additional ₹48,000 crore in funds for the fiscal year 2025. Furthermore, they have requested nearly double the current allocation of ₹1 lakh crore in interest-free long-term loans for capital expenditure offered by the central government. The interim budget for 2024-25 had allocated ₹1.3 lakh crore for special assistance to states for capital investment, mirroring the previous fiscal year’s allocation.
Additionally, these states are pushing for more flexibility in borrowing from the market. Currently, the Union government caps borrowing at 3% of a state’s income or Gross State Domestic Product (GSDP). This limitation has prompted Bihar and Andhra Pradesh to seek adjustments to better fund their development projects.
Bihar has outlined specific funding requests for the construction of nine new airports, two power projects, two river water programs, and the establishment of seven medical colleges. These projects are critical for Bihar’s infrastructure and healthcare development. Andhra Pradesh, on the other hand, is focusing on securing funds for the development of Amaravati, its state capital, and an important irrigation project.
The government has set a fiscal deficit target of 5.1% of GDP in the interim budget presented in February. Balancing these demands with fiscal prudence will be a significant challenge for Finance Minister Nirmala Sitharaman. The funds requested by Naidu and Kumar reflect the pressing needs for infrastructure and capital investment in their respective states. If granted, these funds could significantly impact the states’ economic development, improving infrastructure, healthcare, and overall quality of life for their residents.
The upcoming budget will be closely watched not just for its allocations but also for its strategic direction in addressing the developmental needs of states like Bihar and Andhra Pradesh. The financial support requested highlights the critical nature of state-level projects and the necessity for central government backing to achieve significant progress.
As the budget date approaches, the political and economic implications of these demands will be a focal point of discussion. The collaboration and negotiation between state leaders and the central government will play a crucial role in shaping the final budget and its impact on India’s overall economic landscape.
