‘Nitish-Naidu-yukt’ Budget: Modi keeps allies happy; Bihar, Andhra Pradesh bag lion’s share in FM Sitharaman’s Budget

Finance Minister Nirmala Sitharaman presented the Union Budget for FY 2024-25 in Parliament today. The Budget announcements included significant allocations for Bihar and Andhra Pradesh, states led by parties that are key to the survival of the BJP-led National Democratic Alliance government.

In her Budget speech, FM Sitharaman announced an allocation of Rs 26,000 crore for the development of Andhra Pradesh’s new capital Amravati. The development of Amravati as a world-class city was part of TDP leader Chandrababu Naidu’s election promises as well as his list of demands placed before the Centre. “Our government has made efforts to fulfil the commitments in the Andhra Pradesh Reorganisation Act. Recognising the state’s need for capital, we will facilitate special financial support through multilateral agencies. In the current FY, Rs 15,000 crore will be arranged with additional amounts in future years,” the FM announced.

Bihar, led by Chief Minister Nitish Kumar’s JD(U) in alliance with the BJP, has also seen significant focus among states in the FM’s Budget speech. The Centre announced an allocation of Rs 26,000 crore for the development of highways in Bihar. “On the Amritsar-Kolkata industrial corridor we will support the development of an industrial node in Gaya. It will catalyse the development of the eastern region. We will also support the development of road connectivity projects – Patna-Purnea expressway, Buxar-Bhagalpur highway, Bodhgaya-Rajgir-Vaishali-Darbhanga and an additional two-lane bridge over river Ganga in Buxar for Rs 26,000 crore.”

The FM has also announced an outlay of Rs 11,500 crore for flood-mitigating measures — new and existing — in Bihar. Millions in North Bihar suffer from the deluge as floodwaters from Nepal enter towns and villages leaving them inundated, and throwing normal life out of gear.

Ahead of the Budget presentation, Prime Minister Narendra Modi stressed that the document would outline the intent of the government over the next five years and lay a strong foundation for the government’s commitment to make India a developed country by 2047, the year India marks 100 years of independence.

Allies of the BJP under the banner of the National Democratic Alliance were in focus ahead of the presentation of the FM’s seventh straight Budget and the first in the third term of the Narendra Modi-led government.

The Lok Sabha elections saw the BJP fail to gain a majority on its own, making it reliant on unpredictable allies like the Telugu Desam Party and the Janata Dal (United) which command 16 and 12 seats, respectively.

With the continuity of the government contingent upon allies, there is a heightened expectation of them demanding a greater share of the pie as allocations for their respective states and initiatives they have championed. The JD(U), led by Bihar Chief Minister Nitish Kumar, has demanded a special financial package for the state after the Centre ruled out grant of special status to Bihar. According to Bloomberg, the JD(U) has sought assistance of Rs 30,000 crore from the Centre for this year to help fund projects in the impoverished state.

Similarly, Andhra Pradesh Chief Minister Chandrababu Naidu has sought special status for the state and an allocation of over Rs 1 lakh crore over the next few years with a substantial portion to be paid out in this year’s national budget. On Naidu’s agenda are funds for capital Amravati as well as key infrastructure projects such as Polavaram.