With Hyderabad gone, Andhra Pradesh is on the hunt for a new capital

The politically well-connected stand to make huge sums of money if the Vijayawada area is named the new capital of Andhra Pradesh as expected, writes Samanth Subramanian.

Indian pedestrians and commuters pass by the illuminated Charminar in Hyderabad. Andhra Pradesh is now searching for a new state capital. AFP PHOTO

NEW DELHI // The 60-year-old Indian state of Andhra Pradesh is wrestling with a question almost only faced by newly created countries: how to build itself a new capital.

N Chandrababu Naidu, the chief minister of Andhra Pradesh, was expected on Tuesday to announce that the capital will come up near Vijayawada, on the banks of the Krishna river. But as Tuesday’s date was considered inauspicious by the Hindu astrological calendar, Mr Naidu postponed the announcement. He will now make it on Thursday, in the state legislature.

Part of Andhra Pradesh was sectioned off on June 2 to create the new state of Telangana. Since it lay within the borders of Telangana region, Hyderabad, Andhra Pradesh’s capital, went along with it.

While the buzzing tech city will function as a joint capital for both states until 2024, officials in Andhra Pradesh have been scouting for a new location to house a legislature and establish a new identity.

Members of Mr Naidu’s government have already told the media, off the record, that Vijayawada, the second-largest city in Andhra Pradesh, will receive the honour. Vijayawada is a hub of commerce and industry, in particular automotive and heavy machinery manufacturing. Its burgeoning growth prospects prompted McKinsey Quarterly, a magazine published by United States consulting firm McKinsey to name it a Global City of the Future in 2012.

“In 1953, when Andhra Pradesh was created, Vijayawada was very much the front-runner to be capital,” said Telakapalli Ravi, a Hyderabad-based political analyst and columnist. “But then people felt that it was a citadel of the communist movement, and so it went to Hyderabad.”

Now, Mr Ravi said, the choice of Vijayawada was almost inevitable because Mr Naidu’s political support is largely based in and around the city.

Yet, the process of deciding the new capital has not been without controversy.

Ever since Andhra Pradesh was divided, all 13 districts in the truncated state have vied furiously to host the new capital, aware of the economic and infrastructural development that would follow.

Differences over where to situate the capital have emerged between the state government and a committee appointed by India’s ministry of home affairs.

The committee, headed by K C Sivaramakrishnan, chairman of the New Delhi-based Centre for Policy Research, submitted its bold 188-page report last week.

The report recommended an uncommon approach: distributing the functions of a capital across three areas, the northern port of Visakhapatnam, the largest city in Andhra Pradesh, the southern region of Rayalaseema, and near the town of Nadikudi, in the centre of the state.

“In the contemporary state, there is no particular merit in seeking to locate all government offices in one single place,” the report said.

It said the era in which vast swathes of land could be bought inexpensively to develop a new capital had passed, and distributing the functions of a capital would bring rapid development to three separate areas of the state, rather than a single town or region.

The committee also disagreed with the idea, floated by Mr Naidu’s government, of situating the capital near Vijayawada, which would strain existing infrastructure and prompt unplanned expansions of already dense urban areas.

To convert “some of the best agricultural lands in the country” into an urban settlement would, the report warned, entail the loss of invaluable agricultural land and the unemployment of farm workers. It would “benefit only land speculation and … profit for real estate operators.”

At least one of the committee’s predictions has already been seen.

Land prices in the Vijayawada area have risen sharply since June, from 5 million rupees (Dh303,000) per acre to 80 million rupees or more, according to media reports.

Rumours are rife that much of this land is being snapped up by politicians or those with political connections, who might have advance knowledge of the location of the new capital. Local newspapers have even reported that Sachin Tendulkar, the superstar Indian cricketer who retired last year, purchased 100 acres near Vijayawada.

If the new capital is indeed situated near the city, the owners of this real estate are likely to make huge profits after the government moves to buy land for official buildings and developers start new projects.

“This is why the government has repeatedly been hinting that the choice will be Vijayawada and revealing its hand,” Mr Ravi said.

“These announcements have been artificially pushing up the land rates. There are definitely vested interests at play here.”