Amaravati Capital City Project: Integrated Urban Development Programme, Features and Facts

Context

• The World Bank and the AIIB approved financing for the Amaravati Integrated Urban Development Programme in late 2024, reviving a project that had stalled between 2019 and 2024.
• The Union Budget 2024-25 had promised Rs 15,000 crore for Amaravati in the financial year through multilateral agencies, and HUDCO sanctioned an Rs 11,000 crore loan for the capital’s core infrastructure.
• Construction was formally relaunched in May 2025, with trunk roads, the government complex, housing for employees and flood-protection works taken up again.

Objective and Vision

• Build Amaravati as a people’s capital: a liveable, accessible and sustainable city that serves as the economic, cultural and social hub of Andhra Pradesh.
• Master plan by the Singapore government’s consultants (Surbana Jurong) in 2015; the government core, including the legislature and high court complex, designed by Foster + Partners (Norman Foster).
• Planned as a green and blue city with large public greens, riverfront, canals and reservoirs, solar-powered infrastructure and smart waste management.

Key Features

• Sustainable infrastructure: energy- and water-efficient buildings, stormwater management, rainwater harvesting and green construction norms.
• Smart city systems: smart grid, intelligent traffic management and IoT-based civic services.
• Multi-modal transport: wide trunk roads, planned metro and bus rapid transit, and connectivity to Vijayawada and Guntur.
• Economic zones: dedicated space for IT, education, health, tourism, finance, start-ups, manufacturing and research, to attract domestic and foreign investment.
• Housing and amenities: affordable and premium housing, schools and universities, hospitals, parks, convention and sports facilities.
• PPP model: private investment invited alongside public spending and multilateral loans.

Institutions and Land

• APCRDA (Andhra Pradesh Capital Region Development Authority), created under the APCRDA Act, 2014, plans and executes the capital. The capital region covers about 8,600 sq km; the capital city about 217 sq km.
• Land was assembled through the Land Pooling Scheme, 2015: farmers of 29 villages voluntarily pooled more than 33,000 acres in return for developed plots and annuity payments, one of the largest voluntary land-pooling exercises in India.
• Foundation stone laid by the Prime Minister on 22 October 2015 at Uddandarayunipalem.

Challenges

• Political reversal: in 2020 the state passed a three-capital plan (legislative capital Amaravati, executive capital Visakhapatnam, judicial capital Kurnool); the law was withdrawn in 2021 and the single-capital plan was revived after the 2024 elections.
• Land and resettlement: disputes over pooled land, annuity payments and the livelihood of landless labourers.
• Finance: the first phase needs tens of thousands of crores; funding depends on multilateral loans, HUDCO and central support.
• Flood risk: low-lying Krishna floodplain, requiring embankments and reservoirs.

FAQs

Why does Andhra Pradesh need a new capital?

The Andhra Pradesh Reorganisation Act, 2014 made Hyderabad the joint capital for only ten years, so the residual state needed a capital of its own.

Who is funding Amaravati?

The state government, with loans from the World Bank and AIIB under the integrated urban development programme, a HUDCO loan and central assistance announced in Budget 2024-25.

What is land pooling?

Instead of compulsory acquisition, landowners hand over their land to the authority and receive a smaller developed plot in the planned city, plus an annual payment for a fixed period.