Amaravati 2 Lakh Crore Burden, MAVIGUN the Way Forward

YSRCP State Coordinator Sajjala Ramakrishna Reddy sharply questioned Chief Minister Chandrababu Naidu’s claim that Amaravati is a “self-financed project,” stating that it does not stand up to basic financial scrutiny and is riddled with contradictions.

He pointed out that Chandrababu Naidu’s assertion of a 5,000-acre land bank valued at over ₹50,000 crore—based on an estimated ₹10 crore per acre—does not align with his own documented land purchases. As per registered records, Chandrababu had purchased land at ₹7,500 per square yard, which translates to about ₹3.63 crore per acre. Meanwhile, official Sub-Registrar Office (SRO) values are even lower, at around ₹6,000 per square yard, or approximately ₹2.91 crore per acre.

Sajjala argued that even if Chandrababu’s own purchase rate is taken into account, selling the entire 5,000 acres would yield only around ₹18,000 crore—not the projected ₹50,000 crore. He emphasized that expecting revenues beyond this is unrealistic, especially when the government has already spent comparable amounts, excluding interest liabilities.

Highlighting the widening gap between projections and reality, he stated that contracts awarded in Amaravati have already exceeded ₹50,000 crore. He further noted that the cost of basic infrastructure—including roads, water supply, sewerage, and electricity—is estimated at ₹2 crore per acre. With the project scope expanding to nearly one lakh acres, the total projected expenditure could reach ₹2 lakh crore.

According to Sajjala, the entire spending so far has been driven by borrowings, and future investments too would rely heavily on debt, placing a significant financial burden on the state. He estimated that interest payments alone on ₹2 lakh crore could range between ₹15,000 crore and ₹20,000 crore annually.

He also cautioned that even if land values appreciate to ₹20 crore per acre after development—as claimed—it could take 15 to 20 years to materialize. By then, the cumulative interest burden could swell to between ₹3 lakh crore and ₹4 lakh crore, potentially forcing the government into further borrowing just to service existing debt, thereby creating a compounding debt cycle.

Sajjala remarked that while such a model may benefit a select few through asset creation, the financial strain would ultimately be borne by the entire state and its people. He alleged that these ground realities are well known but are being deliberately overlooked to mislead the public.

He urged citizens to carefully evaluate whether they want a capital development model that risks pushing the state into a prolonged debt trap in the name of Amaravati, or a more pragmatic alternative like Y.S. Jagan Mohan Reddy’s MAVIGUN model, which, he said, can be implemented in phases at a fraction of the cost and has the potential to emerge as a sustainable growth engine without imposing undue financial stress on the state.