PM Modi Relaunches Amaravati Capital Project with ₹58,000 Crore Investment Package

What Happened on May 2, 2025

Prime Minister Narendra Modi inaugurated, laid the foundation stone and dedicated to the nation multiple development projects worth over ₹58,000 crore in Amaravati, Andhra Pradesh. The PM laid foundation stones for 74 projects worth ₹49,000 crore, which include construction of the Assembly, Secretariat and High Court buildings and judicial residential quarters, along with housing buildings for 5,200 families.

The projects include doubling of rail lines between Bugganapalle Cement Nagar and Panyam stations and construction of a third rail line between New West Block Hut Cabin and Vijayawada stations, plus six National Highway projects and one Railway project.

Infrastructure under the Land Pooling Scheme, covering over 1,200 km of roads with integrated utilities, cycle tracks, and flood mitigation systems, was also launched.

The Decision and Leadership

The newly elected Andhra Pradesh government approved a massive ₹65,000 crore investment package, though official launch announcements cite ₹58,000-₹65,000 crore depending on inclusions. Chief Minister N. Chandrababu Naidu revived the Amaravati project after coming to power in 2024 following his TDP alliance's electoral victory.

Naidu's administration has prioritized completing critical infrastructure by 2026, including roads, utilities, government complexes and urban amenities. PM Modi highlighted that Amaravati will energize the vision of 'Swarna Andhra' and stated 'Amaravati is not just a city, it is a force, it is the strength that will transform Andhra Pradesh into a modern state'.

Capital Buildings and Timeline

A cornerstone of the event was foundation stone laying for the Legislative Assembly, High Court, Secretariat and housing for over 5,200 families—projects worth more than ₹11,000 crore that will establish a world-class administrative hub.

The APCRDA project office will be operational in six months, government housing for MLAs, MLCs, ministers, judges and secretaries will be ready in 18 months, and key buildings such as the Legislative Assembly and High Court are expected in 24 months, with the Secretariat slated for completion in 36 months.

Financing and Funding Sources

Of the total project cost, the Government of India committed ₹15,000 crore in financial assistance in 2024 and facilitated support from the World Bank and the Asian Development Bank, each pledging USD 800 million. HUDCO has signed an agreement to extend a loan of ₹11,000 crore, while discussions are ongoing with KfW for an additional ₹5,000 crore.

While ₹6,000 crore has been allocated for the Amaravati Capital City Development Project in the AP Budget 2025, Finance Minister Payyavula Keshav asserted that Amaravati is a self-sustainable project and the government has arranged funds through the Union government in collaboration with the World Bank, Asian Development Bank and HUDCO.

Major Infrastructure Components

The Amaravati plan includes the creation of a 320 km long world-class transport network with underground utility corridors and advanced flood management systems. The plan includes features like e-buses, water taxis, metro connectivity, and dedicated cycling and pedestrian paths to reduce carbon emissions and promote green urban mobility.

Among the first visible developments in Amaravati are campuses of VIT, SRM, and Amrita Universities. BITS Pilani is scheduled to start in 2026, and XLRI will follow soon. AIIMS Mangalagiri is already operational.

Challenges: Farmer Protests and Environmental Concerns

The move has reignited hopes of economic transformation with projections of 1.5 million new jobs, but it still faces challenges, including farmer protests over new land acquisitions and environmental concerns about large-scale construction near the Krishna River basin.

In November 2025, hundreds of landowners blocked survey teams in a routine mapping exercise, vowing not to budge until their cries for enhanced compensation are heeded. With market values skyrocketing to ₹1-2 crore per acre, the original compensation is considered woefully inadequate by affected farmers.

Government officials released ₹1,200 crore in pending annuities since June, and the Chief Minister has scheduled meetings with protest leaders, with whispers of a potential ₹10,000 crore farmer welfare package.

What Changes: From Stalled to Restarted

After a nearly six-year pause, works of Amaravati will now resume. The ambitious project, envisioned by N. Chandrababu Naidu in 2014, became a casualty of Andhra Pradesh's political rivalry when Y.S. Jagan Mohan Reddy's government halted construction in 2019 and proposed a controversial three-capital plan.

With Naidu's return to power in 2024, Amaravati's revival commenced. The estimated budget for Amaravati's developmental works as of 2024 was approximately ₹64,910 crore.

What is Next

A three-year roadmap has been drawn up to complete Phase I, with special focus on rebuilding farmers' confidence and ensuring time-bound execution through a high-power committee. The APCRDA project office will be operational in six months, government housing in 18 months, Legislative Assembly and High Court in 24 months, and the Secretariat in 36 months, while government institutions, hospitals, banks, schools and private organizations are expected to begin operations within 1–2 months and be fully established within 2–4 years.

The government has allocated ₹11,467 crore for immediate works and is seeking international partnerships to fast-track development. The APCRDA is gearing up to attract investments worth over ₹50,000 crore at investment summits, with investments expected across key sectors such as tourism, hospitality, healthcare, education and infrastructure.