Farmers Worried as World Bank Drops Funding for Amaravati Project

Farmers who gave land for pooling are worried as World Bank has dropped funding for Amaravati.

4 min read
Farmers Worried as World Bank Drops Funding for Amaravati Project

With the World Bank withdrawing from the Capital Region Development Project, farmers who had given up their land under the TDP government’s Land Pooling Scheme (LPS) are now banking on the YSRCP government to come to their aid.

The land pooling of the area where the city was to be built was conducted under a separate law that the state government had passed in 2014, called the Andhra Pradesh Capital Region Development Authority (APCRDA) Act.

Under the state’s LPS, those owning land in the capital region could volunteer to give it up to the state government for a portion of the land to be returned to the owner, as a developed plot.


The World Bank had committed to providing a loan of $300 million for Amaravati Sustainable Infrastructure and Institutional Development Project. However, its official website now declares the status of the project as “Dropped”.

Farmers and landowners were already anxious and uncertain about the status of their lands with the YSRCP coming to power and most work in the region coming to a standstill. While some of them are hopeful that CM Jagan Mohan Reddy is bound to continue the work sooner or later, a few others seem to be waiting for the TDP to come back to power after five years.

Ramu from Mandadam village near Thullur says that since his land is close to the city of Vijayawada, the land prices will remain stable irrespective of the status of the capital region.

“We are only 10-12 kilometres away from Vijayawada city. It takes 25 minutes to reach the city. Even if the state government does not develop the plots, there will be enough road connectivity and infrastructure here. A lot of educational institutions like SRM, VIT and Amrita are coming also coming up,” he says.

“The real estate prices have been good here even before the capital was announced. Even now, they have only dropped by about 15 percent since the state government changed. Earlier, the land was going at around Rs 33,000 per square yard.  After the election results, it is around Rs 28,000. It could fall more, but I am confident it will pick up within 6 to 7 months,“ he adds.

Ramu believes that the CM has no option but to continue works in the capital region. “They have to develop a capital somewhere. Already so much land has been pooled here. Where will they find so much land again? The funding will have to come from somewhere. Besides, in 4-5 years, the government might change again. I think this is all just a temporary slump. Things will be fine in the long run,” he says.

Eeshwar Reddy, secretary of Rythu Swarajya Vedika, hopes that the environmental concerns of the fertile region will finally be heeded and ‘development’ works will cease.

“Many farmers were coerced into giving up their land and are unable to cultivate it now. The black soil here is suitable for agriculture and not construction. They were aware that it is dangerous to construct buildings on the floodplain and still went ahead.”
Eeshwar Reddy, Secretary of Rythu Swarajya Vedika

On the other hand, Nageshwar Rao of the Rajadhani Rythu Koolielu Vyavasaya Sankshema Abhivrudhi Sangam (Capital Farmers and Workers Agricultural Welfare Society) says that for many farmers forced to give up land near Lingayapalem, fair compensation is a bigger concern.

“In the case of patta land, for each farmer, they have promised to return a developed plot of 1050 square yards per acre of pooled land. But in the case of assigned land (land allotted for livelihood to economically weak sections, particularly SC and ST), they have only promised 600 square yards of the developed plot per acre. According to the Land Acquisition Act, there should be no difference in compensation,” he says.

Nageshwar Rao says that after the new government was formed, farmers approached Urban Development Minister Botcha Satyanarayana with their concerns. “We are least bothered about World Bank funding. We just want that at least this government give us fair compensation,” he adds.

While some farmers are selling their land before the prices go too low, some are still holding on to their lands and the annual lease paid by the state government.

The annual lease amount was initially Rs 30,000 per acre for unirrigated land, and Rs 50,000 per acre for irrigated land, with a 10 percent increment every year over the past three years.

“Usually, we get the compensation by March or April, but this year we haven’t received it. When we approached the district officials, they said to wait for the budget. There was no specific mention about this in the budget either. Most projects have been stopped. We are not sure what will happen after the re-tendering process, and if they will ever be continued,” says Srikanth, a farmer.

“The state government has to follow a proper process, which we suspect was not done under Chandrababu Naidu. They just created a hype around the capital without a proper plan. But we do want to continue the project, in the interests of the state’s people.”
Srikanth Reddy, Senior YSRCP leader and party spokesperson

The YSRCP has now formulated a sub-committee to probe alleged irregularities in the project. Chief Minister Jagan Mohan Reddy has also alleged insider-trading and claimed that Naidu and his ‘benamis’ allegedly profited by announcing the capital, as they had prior information of land rates shooting up.

"We are awaiting the sub-committee report, which should be out in a few weeks. We will then get more clarity and we will proceed forward. It is a bifurcated state and we already have a revenue deficit. We will now sit down and talk to the Centre and move forward on funding the project," he added.

(This story was originally published in The News Minute and has been reposted with permission)

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

Speaking truth to power requires allies like you.
Become a Quint Insider

or more


3 months
12 months
12 months
Check Insider Benefits
Stay Updated

Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.

Join over 120,000 subscribers!