Shifting Capitals from Amaravati to Vizag: Disabling Growth Engines and Social Justice

This article explores arguments in favour of and against the building of a single new capital as opposed to multiple capitals, in the state of Andhra Pradesh. Further, it probes various aspects central to this issue—the Sivaramakrishnan Committee on suitability of potential capital cities, decentralisation and the feasibility of three capitals, unbalanced development across Andhra Pradesh on ground and in popular culture, and prior growth models for Amaravati. This article argues the need for growth engines to eradicate poverty, similar to that in united Andhra Pradesh of the 1990s and 2000s. With Hyderabad being the capital of Telangana, Amaravati is where the fledgling state's identity and growth engine have to be forged afresh. This article questions the ability of the current state government in building three capitals post-COVID-19, in light of the drastically strained finances. This must be seen alongside plans for creating at least a dozen new districts that would require high administrative expenses.


Nearly a year ago, on 31 July 2020, the Governor of Andhra Pradesh gave his assent to the Andhra Pradesh Decentralisation and Inclusive Development of All Regions Bill and the Andhra Pradesh Capital Region Development Authority Repeal Bill. Pending central interference and the verdicts of the high court on multiple petitions over this issue, a trifurcation of the state capital functions was proposed, gutting any development of Amaravati as the capital city. The current government claims that decentralisation of development can be achieved through decentralisation of administration. Amaravati is portrayed as a case of neo-liberal myth-building benefiting a section of the elites (the dominant Kamma caste in this case) with no regard for lower castes and classes. Decentralisation is seen as the solution for the supposedly unequal development trajectories of the different regions and sections of Andhra society.

Post-bifurcation, Amaravati could have been the site of rejuvenating the identity and progress of Andhra Pradesh. Here, the identity of the residual state could have been imagined afresh. In contrast, the growth of Hyderabad paralleled the migration of Telugu youth abroad in the 1990s and 2000s. As the capital of a large and diverse state, it did not hold the imagination of everyone, especially the upper classes. It evolved into a space of opportunity for everyone except the elites, whose options for migration were varied. But Amaravati was being built in a smaller and more homogeneous state as a space of opportunity for both the commoners and the elite.  

The centre-appointed Sivaramakrishnan Committee in 2014 noted the suitability of Vijayawada Urban Agglomeration (or Vijayawada UA) as a capital. Vijayawada UA is rated highly on parameters of connectivity, water availability, and regional development (Sivaramakrishnan Committee Report 2014). However, they cautioned about adverse effects on this region’s dynamism and urbanisation in situating the capital in the Vijayawada-Guntur area.  

Counter-intuitively, it can be argued that building Amaravati taps into the locally vibrant private sector, given the high cost of developing a greenfield capital. Vijayawada and Guntur are the top two dense cities in South India,1 indicating high urbanisation and economic growth. Locating a capital in either city would have stressed their holding capacity. As these cities continue to expand outwards, a capital located between them would serve as a place to concentrate their financial and urban outgrowth. Simultaneously, it relieves them of demographic stress. This factor outweighs concerns about using 34,000+ acres of fertile land; it is less than 0.03% of the net sown area (15 lakh acres) in Guntur district. Precisely because this region is a rice bowl, using a tiny fraction for non-agricultural purposes will not affect food security at all. 

Yuvajana Sramika Rythu Congress Party (or YSRCP) won 29 out of the 33 seats in Krishna and Guntur districts (where Amaravati is located), matching trends across Andhra. Nor was there anything about shifting capitals in the YSRCP manifesto or its leaders’ election speeches. Both the election and the dissent are expressions of democratic will that can not be explained away by simplistic binaries of caste-inflected dominance or profit-making. Simply locating the capital in Vijayawada or Vizag or Kurnool would only have reinforced existing power networks in these regions. Building a city from scratch, even if it benefits the local land-owning castes initially, envisions a break from these entrenched identity-based networks. 

A perusal of the 29,881 farmers who gave their 34,323 acres of land indicates that an overwhelming majority (nearly 70%) were marginal farmers, that is, landholders who owned less than 2 acres. Nor does a look at demographic and land-holding patterns indicate the dominance of one particular caste in these villages. Holding one social group responsible for the ills or riches of a region or state is a case of rhetoric and propaganda that end up communalising the discourse. A crucial point to note is that the region of Amaravati straddles six Scheduled Caste-reserved constituencies in Krishna and Guntur districts. 

The Idea of Three Capitals: Decentralisation or Window-dressing? 

To begin with, there are two issues with shifting the high court to Kurnool, to develop it as the judicial capital. The idea of developing a city top-down through the ripple effects of a single state institution is a relic of the Nehruvian era. Even if the high court were shifted to Kurnool, benches are to be set up in coastal districts owing to Andhra Pradesh’s size and population, diluting the idea of a judicial capital. The shift is doubtful as setting up high courts or benches is outside state jurisdiction (New Indian Express 2019). The principal seat of the high court at Amaravati was done through a notification by the centre under the Andhra Pradesh Reorganisation Act, 2014. It would require the Union Cabinet to cancel this notification and re-notify accordingly, for the shift to Kurnool to manifest.

The question that arises next is about the setting up of Amaravati as the legislative capital. The idea of a legislative capital mimics the idea of a judicial capital in planning development through a single state institution. Over the years, we have been witness to the rise of the executive state at the cost of the legislature. In contrast to high courts that function most of the year, legislative assemblies in our states (including Andhra Pradesh) have met on an average for less than 10 weeks per year since 2000. Since members of legislative assembly attend sessions for only a few weeks every year, they tend to be based in their constituencies irrespective of where the capital is. 

Thus, administration or development is not being decentralised by having three capitals. As the centre-appointed Sivaramakrishnan Committee pointed out in 2014, genuine decentralisation could be pursued by distributing directorates, state-owned bodies, and departmental heads based on economic geography and other factors. For example, Vizag was recommended to host information technology (IT) and related departments, Ongole for animal husbandry, Anantapur for education, and so on. By choosing to locate all the executive organs—the chief minister’s office (CMO), the secretariat, heads of administrative departments—in Vizag, the capital is being shifted rather than being decentralised. It is ironic that the same spirit of decentralisation has not been displayed when it comes to panchayat bodies, undermining them by having village secretariats (grama sachivalayam) in every village. 

Bucking the trend in our modern history of massive localised protests against land acquisition, farmers in Amaravati have been raising their voices for almost a year now, protesting the government’s decision not to develop this region. By choosing to locate all the executive organs—the CMO, the secretariat, heads of administrative departments—in Vizag, the capital is being shifted rather than being decentralised. Shifting capitals to Vizag, South India’s fourth richest city in per capita income, for decentralisation does not conform with the narrative of developing the backward North Andhra. Shifting capitals to Vizag for decentralisation does not conform with events in the recent past. Prominent business groups were shown the door or forced to shelve their investments in the city. Little interest is shown in saving the historic Waltair division, headquartered at Vizag, from being erased in the process of forming the new railway zone. 

As a potential capital, Vizag is under high risk, both in terms of ecology and security. The Sivaramakrishnan Committee spoke of the dangers of natural disasters hitting Vizag. In contrast, conceived as a “world-class city” to match Singapore, Amaravati would re-territorialise the energies and resources of people who are prolific migrants to other regions and countries, depending on their economic status. This is not empty myth-making. It is grounded in the experience of forging Hyderabad as the city of fortune (Bhagyanagaramu). India’s seventh largest city in the 1980s, it grew into the fifth largest by early 2000s, attracting people from all over the state and country. It pushed the state to a higher growth level, with the development of marginalised and peripheral regions. This was possible only due to its newly created wealth. 

Regional Imbalance on Ground and in Popular Culture

The idea of three capitals was pushed hard by the power corridors by building narratives around development trajectories of the three regions—Uttarandhra (North Andhra Vizag, Vizianagaram, and Srikakulam districts), coastal Andhra, and Rayalaseema. For reasons that are geographical,2 economic,3 and political4 in nature, Uttarandhra and Rayalaseema remained backward for decades. But claims of large inequalities between these regions are untrue. For instance, the much-vaunted East Godavari is sixth in AP in per capita income; Vizag and Nellore from North and South Andhra rank second and fourth. Being a hub of industries such as petrochemicals, pharmaceuticals, steel and a major port, Vizag has the 10th largest gross domestic product (GDP) in India (Haritas 2017). But rampant migration in millions from Srikakulam, Vizianagaram, Anantapur and Kurnool to other districts and states remains a long-running problem.

 The issue of inequalities between these regions is a complex one needing a nuanced perspective. The Srikakulam member of Parliament Rammohan Naidu5 pointed out how among the 930 projects established in Andhra Pradesh between 2016–19, “..more than half of these (59%) were in Rayalaseema and more than a fifth in North Andhra. Prakasam and Nellore districts accounted for 9.9% with the predominantly agrarian Krishna-Godavari region accounting for the rest (10.6%).” The much-vaunted East Godavari is sixth in Andhra Pradesh in per capita income; Vizag and Nellore from North and South Andhra rank second and fourth. Being a hub of industries in petrochemicals, pharmaceuticals, and steel, Vizag boasts the 10th largest GDP among Indian cities. But rampant migration in the millions from Srikakulam, Vizianagaram, Anantapur and Kurnool to other districts and states remains a long-running problem.

 As per the Indian Human Development Survey (IHDS) II, united Andhra Pradesh exhibited among the lowest income inequalities in India. This is directly linked to having among India’s highest female labour force participation rates and an entrepreneurial risk-taking spirit attested by high tenancy rates in a primarily agrarian economy (Rukmini 2019). From large landowners to marginal farmers and landless labourers, a significant fraction of households across caste and class lease land for farming. While Dalits have faced exclusion from tenancy markets, they continue to enjoy high access to land for lease when compared to the all-India average. As determined by NSSO surveys, Andhra has the highest proportion of Dalit households as tenants in India. 

This socio-economic reality is paralleled by the evolution of Telugu Cinema showcasing Telugu people in all their variety and complexity. Be it huge grossers as Srimanthudu, Fida, Rangasthalam, and Aravinda Sametha or critically acclaimed movies such as C/O Kancharapalem, Kanche, Mallesham, Mithunam, Palasa 1978, and Krishna Gaadi Veera Prema Gaadha, Tollywood was ambitious and nuanced in showcasing stories from all regions and sections of Andhra and Telangana. From being caricatured once, the settings and dialects of places such as Srikakulam or Karimnagar became as much a character as the people. 

Growth Engines and Social Justice

Historically, an imbalance within undivided Andhra Pradesh did exist. Being an agrarian economy, the state faced a dilemma. Where are the industries that can utilise the labour and capital shifting from the agricultural sector? What solved this dilemma was the rise of Hyderabad as an economic powerhouse in the 1990s and 2000s. In India, poverty saw the largest decline in Andhra Pradesh, in terms of urban, rural and overall poverty. A booming services sector reduced urban poverty from 35.1% in 1993–94 to 5.8% in 2011–12. Despite the occasional drought, agriculture continued to flourish and similarly reduced rural poverty, from 48% in 1993–94 to 11% in 2011–12 (Panagariya and Rao 2015). With an increase in revenues from high growth rates, irrigation infrastructure was expanded and welfare programs (such as the popular Aarogyasri) were introduced or enhanced. The use of IT brought in transparency, making the implementation of these programmes (including the much-appreciated MGNREGA) more efficient. 

There was a time in the early 1990s when the per capita income and poverty levels of Andhra Pradesh were comparable to Uttar Pradesh. Andhra went on a different trajectory owing to reforms in the economy, building a growth engine to unleash the animal spirits of the society, continuity in governance, and redirecting the revenues to build a durable welfare state. Poverty among Dalits, Scheduled Tribes and Muslims fell sharply, indicating inclusive development. That the state's HDI continued to stagnate through the 1990s (0.21 in 1993) and 2000s (0.31 in 2011–12) was reflected in the uneven development of its regions, leading to bifurcation in 2014 (Mukherjee et al 2014).

Chief Minister Y S Jagan Mohan Reddy need look no further than the actions of his own father who wrested power from Chandrababu Naidu in 2004. The latter’s policies and reforms were kept intact; projects begun by him were completed by YSR. As pointed out in the book, The Making of Miracles in Indian States, IT exports rose from a meagre 20 lakh rupees in 1992 to 32,500 crore rupees in 2009. If his government were to similarly build on the foundations of Amaravati to accelerate growth, it could generate revenues to fund Reddy’s grand Navaratnalu programmes. In reality, many popular schemes introduced in 2014–2019 (Chandranna Bima, Anna Canteens, etc)  have been shut down to redirect funds to the current regime’s new welfare programmes. 

Making up for a considerable shortfall in GST and non-tax revenues, indicating falling incomes, the state has resorted to debt-fuelled spending. The fallout of this is clearly evident in the government’s 2020–21 budget. From an average of approximately 28% in the previous four years, Andhra Pradesh’s debt-to-GDP ratio rose to 34.5%. This is the highest among Indian states, behind only Punjab, Manipur, and Nagaland. Rather than redistributing growing wealth, the present government is merely changing the mechanism of redistribution, financed by a growing debt burden. The COVID-19 pandemic has further depleted the resources and revenues of the state government. In the first three months of 2020–21, it has already utilised 69% of its budgeted borrowings. Will it have the capacity and funds to build the infrastructure and networks necessary for three functioning capitals?

In an assembly discussion in January 2020 on a similar bill trifurcating the capital, Chandrababu Naidu poignantly begged the chief minister not to do this, that having three capitals did not work anywhere in the world. Economic reforms and building of new urban projects must not always be sacrificed on the altar of politics, decentralisation, or redistribution. Andhra economy already faced multiple shocks in 2019, owing to sand ban (Kinjarapu 2019), slowdown in India itself, and negative growth in tax receipts. The year 2020 saw a possible recession with the COVID-19 pandemic already affecting the state’s revenues, employment numbers, MSMEs, and remittance economies of its backward districts. With the advent of the second wave, these trends will continue in 2021. Gutting a potential growth engine such as Amaravati will further harm the government’s ambitious welfare regime and, by extension, the ideas of redistribution and livelihood creation. 

Having three capitals was a questionable move in 2019 and in a post-COVID-19 scenario, it would be a move that is far more questionable than the building of the Central Vista Project. Furthermore, the state government had already announced its intent to divide AP’s 13 districts based on its Lok Sabha constituencies. A much-needed exercise, creating collectorates and dozens of district-level departments from scratch will also put a recurring significant demand on state resources. Recovering from the human and economic devastation of COVID-19 will be tough for any state, leave alone a new state with shaky finances and an ambitious welfare net.  Notwithstanding the significant legal issues involved, Andhra Pradesh is a state that might not be able to afford the ostentation of three capitals.

The ruling party won a thumping majority in local polls all across the state, including in Krishna and Guntur districts that most stood to benefit from a new city (the villages comprising the capital itself, witness to an ongoing protest for 500+ days, saw no polls). Does that mean people support the idea of three capitals or did local issues take precedence in these elections? The loss of Hyderabad was a significant driver of protests in coastal Andhra and Rayalaseema for a united Andhra Pradesh. Its massive growth in the 21st century was partly built on the efforts of migrants from these regions. It was the pride of all Telugus and its loss mattered to them. Should a state now reinvest its new capital city with the kind of ambition and identity that had come to define the making of Hyderabad? Does such an identity linked to linguistic pride and regional heritage matter anymore? 

The author acknowledges the valuable comments of the referee.

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