Rs 1400 crore grant to Visakhapatnam by 15th Finance Commission

The 15th Finance Commission has recommended a grant of 1400 crore for Visakhapatnam. The grant has been recommended for the development of infrastructure in the city, which has been proposed to be made the executive capital of Andhra Pradesh. The grant will be used to focus on roads, the supply of power and water, underground drainage system, and other key areas, which if bolstered, can help in fortifying Visakhapatnam as the economic growth pole of the state.

The 15th Finance Commission also noted that the two million-plus cities in Andhra Pradesh, in terms of population, Visakhapatnam and Vijayawada could act as the engines of economic growth with the right mix of investment in infrastructure and logistics to ensure a better quality of life.

The Commission identified that post bifurcation, in 2014, Andhra Pradesh has turned highly agri-dependent. It also noted that the Gross State Domestic Product (GSDP) of Andhra Pradesh is the lowest in the state, after Kerala. “In the last four years, the State’s revenue expenditure started increasing rapidly at the cost of its capital expenditure. This is highly unsustainable for a new state. Capital investment in irrigation, drinking water, and power should be linked to cost recovery. It faces serious cash flow issues and resorts to frequent ways and means advances with an occasional overdraft,” the Commission’s reform roadmap for the state noted.

“The State needs to focus on improving revenue streams from excise, stamp duty, and royalty from minerals,” it suggested.