AP banking too heavily on “Special Category Status” for funding new projects !!

The AP government wants to take up various projects with more than Rs 79,000 crore external aid and has prepared a report for the same to submit to the Centre. Every year, the Centre asks state governments to send proposals, if any, to get external aid for projects. This time, Andhra Pradesh has proposed 19 projects.

The current debt burden of AP is Rs 1,10,000 crore. If the state is not accorded “special category” status and if the Centre approves all the proposed projects, the debt burden on the state government will reach around Rs 2 lakh crore. If AP gets “special category” status, 90 per cent  of the external aid will be in the form of grants and the remaining 10 per cent will be as loans. In this case, the loan burden will be on the Centre. But if the state does not get “special category” status, it will have to bear the entire burden. Hoping that Andhra Pradesh will get “special category” status soon, the  state government is planning to get huge amounts from external agencies as aid. The major funding external agencies are the World Bank, Asian Development Bank, Japan International Cooperation Agency , Department for International Development, United States Agency for International Development, KFW Development Bank, and Canada International Development Agency.

On the directions of the state government, different departments have prepared concept notes for  the 19 proposed projects and forwarded them to the AP finance department. After a preliminary approval by the state government, these will be sent to the Centre for final approval. Of these, a lion’s share pertains to the irrigation and roads and building departments.

ap special status



One thought on “AP banking too heavily on “Special Category Status” for funding new projects !!

  1. Pingback: Finances of Central government are also tight. Can they help AP even if they want to ?? | Andhra Nation

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