Amaravathi likely to be made new capital of AP: Realty impact
Amaravathi which is located about 40 km west of Vijayawada and about 32 km north of Guntur is likely to be developed as the new capital of Andhra Pradesh. Even though the Andhra Pradesh government has decided on the new capital, the decision was not made public. However, Hyderabad will still continue to remain as the joint capital of both Telangana and Andhra Pradesh for 10 years. The idea of renaming Amaravathi after the former Chief Minister of the State and founder of Telugu Desan, NT Rama Rao did not get much support as it was felt that it was better to retain the original name of the place.
Insufficient funds, land pooling
The Andhra Pradesh government had earlier requested the 14th Finance Commission for a grant of about Rs 1,00,213 crore for the development of the new capital and about Rs 41,253 crore for critical infrastructure development of the new capital. However, the meager amount of funds released by the Commission has cast a shadow on the plans of the government. As a result, the government had decided to resort to land pooling for the development of the new capital. This decision was controversy ridden as it was felt that farmers would have to part with their land, which was their means of livelihood. All such fears were put to rest following the announcement of the Union Budget. It was proposed that farmers who had to part with their land due to land pooling would not alone be adequately compensated by would also be provided jobs in the projects for which their land was acquired.
Consent of land owners
Accordingly, the recently announced State Budget had allocated sufficient funds for acquiring about 33,252 acres of land from land owners towards the capital development. According to statistics obtained by officials, roughly about 87 per cent of land owners have already given their consent for pooling of their land. As per the proposal put forward by the government with regards to land pooling, about 50 per cent of the land thus acquired would be utilized to develop common infrastructure facilities while 25 per cent of the land would be returned to land owners in the form of developed plots.
Impact on Real Estate
With the government deciding on Amaravathi as the new capital of Andhra Pradesh, prices in the locality are likely to rise exorbitantly. A similar scenario prevailed last year following speculations that the Vijayawada–Guntur stretch was likely to be utilized for the development of the new capital. However, with the buzz surrounding this news fading, prices in the region have stabilized considerably. It is in this scenario that the government should intervene and bring about regulations to guard against speculative pricing. Nevertheless, investors in the region can expect good returns for land they have invested in. The region is also expected to see a flurry of residential realty development with developers flocking to invest in residential projects. However, much will depend on the infrastructure development that is expected to come up in the region.
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