Andhra Pradesh, Bihar win big in Sitharaman’s first coalition budget

The Union Budget on Tuesday proposed significant sops for the states of Bihar and Andhra Pradesh, which are ruled by parties allied with the central government. 

Presenting the budget for fiscal 2025, finance minister Nirmala Sitharaman unveiled a plan, Purvodaya, for the all-round development of the eastern region of the country covering Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. 

“This will cover human resource development, infrastructure, and generation of economic opportunities to make the region an engine to attain Viksit Bharat,” the finance minister said. 

She also announced separate allocations for different schemes in Bihar and Andhra Pradesh. 

This was Sitharaman’s first budget after Prime Minister Narendra Modi secured a third term at the Centre with the support of National Democratic Alliance (NDA) partners as Bharatiya Janata Party failed to reach the majority on its own. 

Bihar 

Bihar chief minister and Janata Dal (United) supremo Nitish Kumar has been demanding “special status” for Bihar, which would entitle it for additional funds for development projects. While the government rejected the demand of a special status, the finance minister announced separate schemes for the state, in a move seen to placate Kumar, whose support is crucial for the survival of the NDA government at the center. 

Sitharaman unveiled an outlay of ₹26,000 crore for various road projects in Bihar and announced construction of new airports, medical colleges, and sports infrastructure.

The allocated funds will be used to support the  development of Patna-Purnea Expressway, Buxar-Bhagalpur Expressway, Bodhgaya, Rajgir, Vaishali and Darbhanga spurs, and additional 2-lane bridge over river Ganga at Buxar, the finance minister said, 

She also allocated ₹21,400 crore for power projects in the state, including setting up of a new 2400 MW power plant at Pirpainti in Bhagalpur district. 

Besides, the central government will support development of an industrial node at Gaya on the Amritsar-Kolkata Industrial Corridor.

“This corridor will catalyze industrial development of the eastern region. The industrial node at Gaya will also be a good model for developing our ancient centers of cultural importance into future centers of modern economy. This model shall showcase “Vikas bhi Virasat bhi” in our growth trajectory,” Sitharaman said. 

“An additional allocation to support capital investments will be provided. The requests of Bihar Government for external assistance from multilateral development banks will be expedited,” she added. 

Noting that Bihar has frequently suffered from floods, many of them originating outside the country, the finance minister announced a financial support of ₹11,500 crore for irrigation and flood mitigation projects through the Accelerated Irrigation Benefit Programme and other sources. The funds will support Kosi-Mechi intra-state link and 20 other ongoing and new schemes including barrages, river pollution abatement and irrigation projects.

In addition, survey and investigation of Kosi related flood mitigation and irrigation projects will be undertaken, Sitharaman said.

On cultural front, the central government will support a comprehensive development of Vishnupad Temple Corridor in Gaya and Mahabodhi Temple Corridor in Bodh Gaya to transform them into world class pilgrim and tourist destinations.

A comprehensive development initiative for Rajgir, which holds immense religious significance for Hindus, Buddhists and Jains, will also be undertaken, Sitharaman said in her budget speech. 

Besides, the central government will support the development of Nalanda as a tourist center besides reviving Nalanda University. 

Andhra Pradesh

Andhra Pradesh, which has also been demanding a special status after the reorganization of the state in 2014, also received special attention in the Union Budget 2024. 

The BJP, which failed to touch the majority mark in Lok Sabha in the recently concluded election relies on the support of Andhra Pradesh chief minister Chandrababu Naidu’s Telugu Desam Party for survival. 

Sitharaman emphasized on fulfilling the commitments in the Andhra Pradesh Reorganisation Act 2014, including funds for promoting industrial development. Fulfilling the commitments made in the Reorganisation Act has been one of the key demands of Naidu and his predecessor Y. S. Jagan Mohan Reddy.

“Funds will be provided for essential infrastructure such as water, power, railways and roads in Kopparthy node on the Visakhapatnam-Chennai Industrial Corridor and Orvakal node on Hyderabad-Bengaluru Industrial Corridor,” Sitharaman said. 

 An additional allocation will be provided this year towards capital investment for economic growth, she added.  

The government also committed to financing and early completion of the Polavaram Irrigation Project, recognizing it as the lifeline for Andhra Pradesh and its farmers. 

Grants for backward regions of Rayalaseema, Prakasam, and North Coastal Andhra, as stated in the Act, will also be provided, the finance minister added. 

Besides, the state will also receive ₹15,000 crore as special financial support in the current financial year for the development of its new capital. The budget promised additional amounts in future years for the purpose.