Andhra’s Grand City: Amaravati Sets A New Record By Raising Rs 2,000 Crore Through Bonds For Infra Development

Addressing a gathering at the Bombay Stock Exchange (BSE), Andra Pradesh Chief Minister Chandrababu Naidu said that the state government does not see any problem in "mobilising even $2-4 trillion" for infrastructure development works in the state capital of Amaravati.

Naidu was speaking , at the BSE to mark the listing of 'Amaravati Bond', which helped the Andhra Pradesh state government raise Rs 2,000 crores earlier this month. The bond had been a roaring success and saw a record over-subscription of 1.53 times. The Chief Minister also said that the capital city of Amaravati being built now would be "the most liveable place" with electric vehicles, green buildings and central cooling systems.

The Amaravati bond has set a record of sorts in India by raising Rs 2,000 crores in one go - all the various municipalities across the country have cumulatively been able to raise only Rs 1,800 crores so far. The money raised through the bond will be used as an equity pool which will then be invested "towards equity contributions for various infrastructure projects of Greenfield capital city construction at Amaravati'.

Opposition parties in Andhra Pradesh, however, have questioned the wisdom of raising money through bonds for building Amaravati. The Bharatiya Janata Party's state unit president Kanna Lakshminarayana had earlier this month criticised the government for raising money at exorbitant interest rates. The Amaravati Bond, for instance, carries a coupon rate of 10.32 per cent payable quarterly.

In June this year, the Andhra Pradesh government signed a series of agreements with the Singapore government and other entities based in the city-state. Some 1,691 acres of land is to be allotted for the development of a start-up area in the capital city. Singapore had also opened a dedicated Amaravati Development Office to ensure full attention to capital development programs. It was also agreed to establish air connection between Vijayawada and Singapore.

The Capital Region Development Authority, which is the state government’s agency that issued the bonds and is the nodal body for the building of Andhra's new capital, revealed that projects worth Rs 27,000 crores are already underway at Amaravati. Projects worth Rs 11,000 crores, according to the agency, are ready to be awarded. The city is coming up over an area of 33,000 acres of land which had been acquired through an innovative land pooling scheme. Some 27,000 farmers have contributed land towards building the state's capital city.