Way forward for Andhra Pradesh: Challenges before the new Chandrababu Naidu government

There are a host of freebies announced by Naidu, which may cost the exchequer, according to YS Jagan, up to ₹1.50 lakh crore a year.

ByRamesh Kandula

Published Jul 10, 2024 | 9:00 AM Updated Jul 10, 2024 | 9:34 AM

Naidu distributing social security pension to a family in Penumaka, near Vijayawada

South First brings to you a series on what the newly elected government in Andhra Pradesh led by Chandrababu Naidu has in store as it navigates fiscal, social-economic and policy challenges. The series will explore the concerns before the TDP government and possible way forward to address key sectoral issues.

A festival atmosphere prevailed in Andhra Pradesh on 1 July after as many as 65 lakh underprivileged people across the state received up to ₹7,000 each as social security pensions.

The social security pension disbursal witnessed Chief Minister N Chandrababu Naidu handing over the amount to a family in Penumaka near Vijayawada.

With an increase of ₹1,000 for each beneficiary every month, the Andhra Pradesh government will have to spend roughly ₹3,300 crore a month for old-age pensions alone.

There are also a host of other freebies announced by Naidu during the campaign, which may cost the exchequer, according to YSRCP chief and former chief minister YS Jagan Mohan Reddy, up to ₹1.50 lakh crore a year.

This is only one of the several difficulties facing the Naidu government.

Also Read: AP gets ready to deliver social security pensions using government staff

Challenges galore

The newly elected government in Andhra Pradesh faces a multitude of challenges as it takes the reins of a state in dire financial straits.

Among the most pressing issues are the need to complete the first phase of construction of its capital Amaravati, and the Polavaram Irrigation Project, both of which have faced significant hurdles under the previous administration.

The alliance that has come to power has made several election promises, including increasing the amounts for various welfare schemes such as old age pensions and Amma Vodi.

Balancing these promises with the urgent need for infrastructure development, which took a backseat during the YS Jagan Mohan Reddy government, will be crucial.

The state of Andhra Pradesh is grappling with a severe financial crisis. The fiscal deficit has ballooned, and public debt has soared, largely due to unplanned expenditures and populist schemes initiated by the previous administration.

The new government inherits a precarious economic situation that demands immediate and effective financial management.

Measures are needed to curtail unnecessary expenditures, increase revenue generation, and secure funds for ongoing and new projects.

Additionally, the new government must investigate the various omissions and commissions of the YSRCP government regarding the liquor policy and sand policy, and misuse of police and official machinery for political purposes, while avoiding the appearance of vindictiveness. Investigating these issues is crucial to restore public trust and ensure accountability.

However, it must be careful to avoid the perception of vindictiveness, which could lead to political instability and distract from governance.

A balanced approach that emphasises transparency, fairness, and the rule of law will be essential in addressing these issues.

Also Read: The Buddha has awakened once again in Andhra Pradesh

Amaravati and Polavaram projects

One of the most critical challenges in front of the new government is the completion of the Amaravati capital project. The first phase of construction has been marred by delays and controversies, leaving the project in limbo.

Amaravati envisioned as a modern, world-class capital, is essential for the administrative and economic development of the state.

Reviving and accelerating the construction of Amaravati will not only restore confidence among investors but also provide much-needed employment and spur economic activity.

Similarly, the Polavaram Irrigation Project, which is crucial for the state’s agrarian economy, has faced numerous obstacles.

Issues ranging from land acquisition and rehabilitation to technical and financial hurdles have plagued the project.

Ensuring the timely completion of Polavaram will significantly enhance irrigation facilities, mitigate drought impacts, and boost agricultural productivity, benefiting thousands of farmers across the state.

Also Read: It would take ₹12,157 crore and 4 years to complete Polavaram project, says CM

Election promises and welfare schemes

The alliance in power made several ambitious election promises, including the enhancement of welfare schemes such as old age pensions and the Amma Vodi programme, which provides financial assistance to mothers for their children’s education.

While these schemes are essential for social welfare and uplifting the underprivileged, they also place a substantial burden on the state’s finances.

The new government must find a balance between fulfilling these promises and maintaining fiscal prudence. This will require innovative financial strategies, efficient resource management, and perhaps renegotiation of certain promises to align with the state’s economic realities.

Under the YS Jagan Mohan Reddy government, infrastructure development took a backseat, leading to stagnation in industrial growth and overall economic development.

The new government needs to prioritise infrastructure projects, including roads, ports, and industrial corridors, to attract investments and create job opportunities.

Improving infrastructure will not only boost economic growth but also enhance the state’s competitiveness and attractiveness as an investment destination.

Also read: Amaravati is sole capital, says Naidu

Reviving industrial confidence

During the YS Jagan Mohan Reddy regime, the industrial sector felt unwelcome, and there was a marked decline in big-ticket investments.

The new government must work to restore confidence among industrialists and investors. This can be achieved by creating a business-friendly environment, simplifying regulatory processes, and offering incentives for investment.

Naidu’s image as a proactive and investment-friendly chief minister could play a significant role in attracting investments and reviving the state’s industrial growth.

His previous tenure saw significant industrial development, and leveraging his experience and reputation can help turn the tide for the better.

Putting the administration back on track for development is another critical challenge.

The new government needs to ensure that bureaucracy is efficient, transparent, and focused on delivering results.

This will involve restructuring administrative processes, improving governance mechanisms, and fostering a culture of accountability and performance.

Also Read: TDP seeking more than $12 billion financial aid from Union government

Leveraging central government support

With the ruling coalition being part of the NDA, the Andhra Pradesh government can leverage better support from the Union government.

This relationship can be instrumental in securing funds, approvals, and support for various state projects.

Ensuring a cooperative and collaborative relationship with the Union government will be crucial for the successful implementation of key projects and the overall development of the state.

The new government in Andhra Pradesh faces a complex array of challenges, from addressing the state’s financial crisis to completing crucial infrastructure projects and fulfilling welfare promises.

Balancing these demands while ensuring good governance, transparency, and industrial growth will be essential for the state’s progress.

Naidu’s leadership and experience offer a beacon of hope, but the road ahead requires careful planning, decisive action, and a balanced approach to governance.

By focusing on these key areas, the new government can navigate the challenges and set Andhra Pradesh on a path of sustained growth and development.

(Ramesh Kandula is a journalist and author based in Hyderabad. Penguin published his recent political biography of NT Rama Rao, ‘Maverick Messiah.’ Views are personal.)

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