Having a greenfield capital is always good for a new State: Institute of Development Studies Andhra Pradesh chairman

Prof. Mahendra Dev discusses the importance of a greenfield capital like Amaravati and balancing freebies with development in Andhra Pradesh.

Post bifurcation of Andhra Pradesh in 2014, the residual State of A.P. had always faced the dilemma of positioning its capital city. Many economists would suggest that having a greenfield capital would always be a better option. So selecting Amaravati, as the capital city, appears to be a wise decision, as anything that comes up new will have a multiplier effect, in the medium and in the long run, said Prof. Mahendra Dev, chairman of Institute of Development Studies Andhra Pradesh (IDSAP) and member of the Finance Committee of A.P.

In an exclusive chat with The Hindu, he said, the Vajpayee government had started the National Highway Golden Quadrilateral project and today it is paying dividends, across the country.

As per a World Bank report, the district of Srikakulam had benefited immensely from the NH project, as it has opened up many avenues for the people, especially the rural people. Similarly, once Amaravati comes up, it will have a multiplier effect in the entire region and such benefits are much better than the cash transfers or the freebies, he said.

Critical of the freebie culture he said, “As of now the financial condition of the State of Andhra Pradesh is in a precarious situation and on top of that such huge amount for freebies would hit the State finances very hard.”

Freebies may be good as electoral policies but not for the State finances. As per Niti Aayog, A.P. is in the 17th position as far as finances are concerned and the present government needs to balance the freebies with development, which is a difficult task and it cannot be overcome overnight, said Prof. Mahendra.

According to him the debt burden increases with the interest payable and the government should cut freebies to make more investments in human infrastructure such as in the health and education sector, especially in the primary and secondary education sector.

“If one half of the revenue goes for freebies, where is the money for other expenditure,” he asked.