Realising that the chances of securing assistance from the Centre are remote at this point, the Andhra Pradesh government is examining the possibility of issuing bonds worth ₹42,000 crore for the construction of its capital city, Amaravati. The State’s Capital Region Development Authority (CRDA) officials are “working on the proposal,” according to sources.
CRDA authorities placed the idea before Chief Minister N. Chandrababu Naidu at a review meeting recently. Responding positively, Mr. Naidu asked them to revert with the details, CRDA sources say.
A committee is working on the rate of interest the bonds may carry. The Reserve Bank of India’s savings bond carries an interest of 7.75%, whereas small saving schemes such as the National Savings Certificate offer 7.6%. It will be easier to attract investors if the rate of interest is fixed at 8%, say CRDA officials.
Overseas investors
“The Chief Minister suggested that special bonds be issued for overseas Telugus, or Non Resident Telugus in official jargon, as they are keen on being a part of capital construction,” a senior official said. ‘Amaravati Bonds’ and ‘Smart City Bonds’ are among the six names proposed.
In the last four years, the Centre has released ₹1,000 crore for projects in Vijayawada and Guntur, and ₹1,500 crore for the construction of Amaravati. The State’s estimate for its capital city is about ₹52,000 crore.
