AP finalises blueprint for a big push to urban infra through PPP to raise GSDP to ₹2.8 lakh crore

After finalising an action plan, the Municipal Administration and Urban Development (MA&UD) Department of Andhra Pradesh has decided to accord top priority to infrastructure development in all urban areas of the State to eventually lead to a ₹2.8 lakh crore growth in the GSDP.

MA&UD Department has estimated that ₹66,523 crore will have to be invested by 2029 in urban infrastructure across 12 thematic areas including smart water systems, modern transportation networks, and sustainable housing solutions. This excludes the capital city development requirements of Amaravati.

To achieve these goals, the department has firmed up a comprehensive PPP strategy, and the State Government has earmarked ₹2,000 crore as Viability Gap Funding (VGF) in the current year’s budget. These initiatives are projected to generate 2,30,000 direct and indirect jobs across construction, technology, and urban service sectors, with a focus on 45% skilled employment for youth and 35% women’s participation in emerging urban industries.

As part of the vision, the State will prioritise five smart cities equipped with integrated IoT infrastructure, 2,500 km of upgraded road networks, 15 new urban transit systems, and adoption of green building standards aimed at achieving 40% higher energy efficiency in all new urban developments.

“We are setting benchmarks to ensure infrastructure development meets international standards and enhances the urban living experience. These projects will create unprecedented economic momentum and position Andhra Pradesh as one of India’s fastest-growing urban development hubs with sustainable funding models,” said S. Suresh Kumar, Principal Secretary, MA&UD Department.

The State aims to attract ₹35,000 crore in FDI into the proposed eight new economic zones, which are expected to catalyse regional economic development and industrial growth.

For this, innovative financing mechanisms and partnership structures are being developed.

“We have established a dedicated PPP unit and finalised a comprehensive policy framework. A roadmap for successful execution and risk mitigation of PPP projects has been prepared. These will be supported by strong technology integration and performance monitoring,” the Principal Secretary added.

The government will also extend financial incentives to expedite PPP project execution.

“For timely and effective implementation, we will leverage finance from international institutions, issue municipal bonds and green bonds, and operationalise innovative financing structures and credit enhancement mechanisms,” he noted.