Bad time for Amaravati funding. The Department of Economic Affairs (DEA) under the Union Ministry of Finance has cut down by half the quantum of loan that Andhra Pradesh wanted to secure from the World Bank for the construction of new capital Amaravati.
The Centre had initially given in principle approval for one billion USD loan in March 2016, but now has reduced the loan amount to 500 million USD only. The DEA subsequently realised that rules did not permit the quantum in a single tranche. Accordingly, the loan proposal was cut down by half.
The WB has received a request from the Government of India for a 500 million USD loan for the first phase development of Amaravati. It is however, yet to approve the loan as it is currently working with the AP government and the Capital Region Development Authority (CRDA) to prepare the project.
It has been reported that the WB has kept the loan proposal on hold, if not rejected, as the capital construction is faced with litigation before the National Green Tribunal (NGT).
CRDA officials fear the WB might not clear the loan proposal till the NGT gives the green signal for the capital construction. If the loan is delayed or rejected, it could jeopardise AP’s plan to develop the first phase of a ‘world-class’ capital by 2018-19.