The worst fears of Andhra Pradesh government came true finally. The Central government seems to be keen on pushing the expense of Polavaram Project on to the state. Until now, Center is saying that it will fund the expense of the National Project through loans from NABARD. But that is not so simple as it appears.
The central government informed that NABARD loans are to be repaid by the state government along with interest. Moreover, these loans will be added to FRBM limits of the state which will restrict the state government for going to big loans. Polavaram Project is recognized as National Project as per the State Reorganization Act.
According to the definition of the National Project, the Central government should fund the entire expense of the project. Polavaram Multi-Purpose Irrigation Project comes with a total capacity of 194 TMC which will irrigate about Five Lakh Acres over Two Crops Every year. The Project will also generate 960MW of Hydel Power which is the cheapest available power in the market right now. Hence the project is said to be very beneficial for the state and is treated as the ‘Life Line’.
