AP to float Build Andhra bonds for capital

AP to float Build Andhra bonds for capital
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Andhra Pradesh government will float municipal bonds christened as ‘Build Andhra Bonds’ to raise funds for the new capital coming up in Vijayawada.

Hyderabad: Andhra Pradesh government will float municipal bonds christened as ‘Build Andhra Bonds’ to raise funds for the new capital coming up in Vijayawada. Principal Secretary, Finance, P V Ramesh, the architect of these bonds, briefed the Reserve Bank of India Governor Raghuram Rajan who had interaction with the Finance Minister Yanamala Ramakrishnudu and the officials of Finance Department at the Secretariat on Wednesday.

Later talking to this correspondent, Ramesh said the private agencies would float these bonds through a proposed special purpose vehicle and in order to service these bonds, the government might hike the property tax and water tax.

Asked whether it would be huge financial burden on the people of Vijayawada if the taxes were hiked, Ramesh said with the completion of capital the living standard of people would increase and they would be ensured of a better quality of life.

“The government is looking at raising Rs 30,000 crore through these bonds,” Ramesh said. It is not yet decided whether a special purpose vehicle or the proposed Capital Regional Development Authority would take it up. Even if a special purpose vehicle was launched, it would be operated under the Capital Regional Development Authority, he added.


The estimated cost of the capital development is put at Rs 1 lakh crore and the AP government is expecting Rs 50,000 crore assistance from the Centre and another Rs 20,000 crore would be raised through Public Private Partnership schemes.

When he was reminded that the Center sanctioned only Rs 5,000 crore to Chhattisgarh government for development of its capital, Ramesh said, “Modi is generous to add one more zero and make it Rs 50,000 crore.’’

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