Amaravati Declared Permanent Capital: Andhra Pradesh Reorganisation (Amendment) Act 2026 Explained

The Indian President has given her assent to the Andhra Pradesh Reorganisation (Amendment) Act 2026, granting Amaravati full legal recognition as the permanent capital of Andhra Pradesh.

Background- Bifurcation of Andhra Pradesh (2014)

• Division of the State: The Andhra Pradesh Reorganisation Act, 2014 led to the bifurcation of the erstwhile state of Andhra Pradesh and the creation of Telangana.
• Hyderabad as Capital: The city of Hyderabad, which was the major economic and revenue centre of the unified state, was allocated to Telangana (though it functioned as a joint capital for both states for a limited transitional period).
• Fiscal and Administrative Challenges: The residuary state of Andhra Pradesh faced a significant revenue deficit and lacked a capital city, necessitating the creation of a new administrative and economic hub.

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Original Vision for Amaravati Capital

• World-Class Capital Vision: The government proposed Amaravati as a world-class greenfield capital comparable to Hyderabad, featuring modern infrastructure, governance hubs, and strong potential for global investment.
• Strategic Location: Amaravati was planned along the banks of the Krishna River for connectivity and regional development.
• Innovative Land Pooling Model: Instead of relying on compulsory acquisition under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the state implemented a Land Pooling Scheme.
  • In this scheme, the farmers voluntarily contributed land in return for developed residential/commercial plots and a 10-year annuity compensation package. 

Criticisms of the Amaravati Model

• Exclusion of Landless Labourers: The Land Pooling Scheme primarily compensated landowners through plots and annuity payments, while landless agricultural labourers dependent on those farms received little or no compensation.
• Environmental Concerns: The proposed capital city of Amaravati was planned on highly fertile agricultural land in the Krishna River basin, leading to criticism that urban development was prioritised over agricultural sustainability and ecological balance.
• Allegations of Political Favoritism: Critics alleged that the chosen location of Amaravati disproportionately benefited a particular community perceived to be politically aligned with the ruling party.

2019 Policy Shift – Three Capitals Proposal

• Change in Political Leadership: After the 2019 elections, the new state government paused the Amaravati capital project initiated by the previous administration, citing alleged irregularities and inadequate central funding.
• Proposal for Decentralised Capitals: The new government proposed a three-capital model to promote regional balance in Andhra Pradesh:
  • Executive Capital: Visakhapatnam – location of the state secretariat and government offices.
  • Legislative Capital: Amaravati – seat of the State Legislative Assembly.
  • Judicial Capital: Kurnool – proposed location of the High Court.
• Implementation Challenges and Uncertainty: The shift triggered legal challenges, protests by farmers who had pooled land for Amaravati, and a halt in infrastructure construction, leaving the capital development process in prolonged uncertainty.

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2024 Reversal and Parliamentary Confirmation

• Return to Amaravati Model: After the 2024 elections, the previous government returned to power and revived the single-capital vision centred on Amaravati, reversing the earlier three-capital proposal.
• Parliamentary Confirmation: The Parliament of India recently reaffirmed Amaravati as the official capital of Andhra Pradesh, providing policy clarity and strengthening the state’s administrative roadmap.

Financial Support and Special Status Issue

• Demand for Special Category Status: During the bifurcation under the Andhra Pradesh Reorganisation Act, 2014, assurances were made regarding Special Category Status (SCS) for Andhra Pradesh, but the status has not been granted.
• Constraint after Finance Commission Recommendations: Following the recommendations of the Fourteenth Finance Commission, the framework for granting Special Category Status became limited, leaving the state largely dependent on borrowings and externally aided projects for capital city development.
• Alternative Funding Approach: Instead of direct central grants, the Union Government has supported low-interest external financing from institutions such as the World Bank to fund infrastructure development in Amaravati.

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Conclusion

The capital saga of Andhra Pradesh underscores how political brinkmanship delayed development and harmed stakeholders.

• However, the renewed focus on building Amaravati aims to finally realise the vision of a stable and world-class capital.

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