When Chandrababu Naidu takes the oath as Andhra Pradesh Chief Minister on June 12 at Amaravati, it will mark more than just his political comeback. For Naidu, Amaravati has always been the centerpiece of his vision for the state — a world-class city that rivals Singapore, built from the ground up.
In his earlier stint as chief minister, Naidu had planned to build Amaravati as a greenfield capital with an investment exceeding Rs 50,000 crore. In 2016, Naidu had announced plans for nine theme cities and 27 townships in Amaravati, igniting a construction boom. With a Master Plan in place, the World Bank and Asian Infrastructure Investment Bank pledged $300 million and $200 million, respectively. However, the funding went into a limbo after the Telugu Desam Party lost the 2019 assembly elections.
With the YSRCP winning and Jagan Mohan Reddy taking over as Chief Minister, development came to a halt, turning Amaravati into a ghost town.
The Jagan government wanted to build three capitals across the state, to ensure equitable development. This led to a crash in land prices in the Amaravati region.
As part of the aborted plan, the outgoing CM tried to shift the administrative centre to the coastal city of Visakhapatnam, seat the higher judiciary at Kurnool and only retain the legislative assembly at Amaravati. The plan never took off on account of the multiple legal, logistical and cost challenges that were inherent in it. In November 2021, the state government withdrew a legislative proposal on the formation of three capitals. Last year, the Comptroller and Auditor General reported that land acquired for the project lay idle despite Rs 10,000 crore spent, failing to meet the Land Pooling Scheme's objectives.
The capital's location has been a contentious issue since Andhra Pradesh's bifurcation in 2014, when Hyderabad was designated as a shared capital for Telangana and Andhra Pradesh for ten years. As per the Andhra Pradesh Reorganisation Act, Hyderabad has ceased to be Andhra Pradesh's capital since June 2 this year. As a result, the incoming government will have to move quickly in shifting the seat of power to Amravati and getting things up and running from the city that is located on the banks of the river Krishna in Guntur district.
The Centre is likely to provide all support in this exercise. Prime Minister Narendra Modi had laid the foundation stone of the new capital of Amaravati in October 2015, and the state government started operating from newly built facilities by March 2017.
Naidu's new influence after his Lok Sabha and Assembly wins this year, and the need to quickly set up Amaravati as a fully functional capital city has given its dormant real estate sector a fresh lease of life. Businessmen are ecstatic and feel that ‘ache din’ are ahead for the Amaravati region real estate.
After staying stagnant for nearly four years, land prices in the city have begun to shoot up. "Immediately after results were declared, we saw a rapid influx of buyers in a huge way. Land rates have shot up to Rs 40-50,000 per sq yard from Rs 10-15,000 per square yard," Manoj Kumar J, a realtor, told Business Today. “We're seeing a huge rise in prices for both commercial as well as for residential areas. We're seeing price hike in places like Velgapudi, Kondampalem residential areas, whereas places near universities like VIT and Amrutha and others will definitely be increasing”, he added.
As per Andhra Pradesh CRDA, since March, plot registrations in Amaravati have seen a notable uptick. The total number of plots registered has reached 43,669, while 21,095 plots are still pending registration. This increase reflects increased market confidence, likely driven by recent political developments and anticipated infrastructure projects.
"These elections have definitely increased the value of land in Amaravati. This is a great opportunity for the people of AP and South India to come and invest here. After the formation of the new TDP government, we're anticipating much development in the upcoming two years," Kumar added.
The industry is also awaiting any moves that the incoming government may take on revising land ‘circle’ rates. In 2022, land values had been revised after the formation of new districts. A revision in such rates sets a new floor for market prices of land, as the circle rate is the minimum price of a property, which is decided by state governments and is used to calculate stamp duty, registration charges and taxation.
However, there are multiple litigations that Naidu and his government will have resolve, including changes to the Master Plan, among a bunch of other petitions from various stakeholders including agitating farmers of Guntur district who had given over 33,000 acres of land to the state government through a land pooling scheme in return for developed plots and lease payments for 10-year period.
Incidentally, a river-front house on Karakatta Road in Undavalli where Naidu had moved to since the state was bifurcated has been in the eye of the alleged Amaravati land scam, where it was claimed the house was part of an illegal quid-pro-quo for leaking designs and alignment of a major road in the nascent capital.with inputs from Apoorva Jayachandran