Minister of Finance Payyavula Keshav claimed that the State missed out on up to ₹38,000 crore in Central grants following the 16th Finance Commission (FC) recommendations. He added that these funds would have bridged the revenue deficit, which was ₹16,000 crore in 2014-19 and is projected to widen to ₹48,000 crore in 2025-26.

Replying to a question by TDP MLA Burla Ramanjaneyulu in the Legislative Assembly on Monday (August 17, 2026) about whether the special grants given to the States were discontinued in the Union Budget for 2026-27, Mr. Keshav said that all States were affected by the recommendations of the 16th Finance Commission. He further added that what made Andhra Pradesh’s situation particularly difficult was the utilisation of nearly ₹50,000 crore of Central grants by the previous government, which included the 15th Finance Commission grants for 2024-25 and 2025-26 that were drawn in advance.

However, as the State government pressed for financial assistance to tide over the crisis, the Centre sanctioned ₹15,000 crore for the construction of the capital city Amaravati, ₹12,157 crore for Polavaram project, and 50-year interest-free loans under the Special Assistance to States for Capital Investment (SASCI) scheme amounting to ₹7,900 crore in 2024-25, ₹8,255 crore in 2025-26 and approximately ₹3,430 crore so far in the current financial year, the Minister said.

Mr. Keshav added that the Central government has given in-principle clearance for the development of Rayalaseema Global Horticulture Hub and agreed to contribute ₹10,000 crore in addition to the State’s share of ₹30,000 crore.

The Centre also extended support for the development of Visakhapatnam Economic Region conceived to have 49 projects with a total investment of ₹8,00,000 crore in PPP mode. The State government availed an assistance of nearly ₹4,000 crore from the Government of India’s Urban Infrastructure Development Fund, he added.

The Minister further said that the Centre ‘invested’ ₹10,300 crore on Rashtriya Ispat Nigam Limited (RINL). Renegotiation of interests payable on loans raised by the YSRCP government at rates as high as 13.50% resulted in annual savings of roughly ₹1,100 crore, he said.

“Union Finance Minister Nirmala Sitharaman helped the State in bringing those interest rates down to manageable levels,” Mr. Keshav said, adding that about ₹30,000 crore was spent on the revival of 89 Centrally Sponsored Schemes and recovery from the financial destruction caused by the YSRCP was going to be a long process.

Published - August 17, 2026 06:56 pm IST