Centre approves ₹2,000 Crore interest free loan for Andhra Pradesh under SASCI scheme

The State Government of Andhra Pradesh has been sanctioned ₹2,000 crore under the Special Assistance to States for Capital Investment (SASCI) scheme by the Union Ministry of Finance for the reconstruction and strengthening of rural roads. The announcement was made by Deputy Chief Minister Pawan Kalyan, who also holds the Panchayat Raj and Rural Development portfolios.

Funds for Rural Road Strengthening

The funds have been approved as part of the Central Government’s capital investment support to states and are to be utilised mainly for improving Panchayat Raj roads in rural areas. The first tranche of the sanctioned amount is expected to be released by December 2025, following the verification of project proposals and utilisation plans.

The Panchayat Raj and Rural Development Department has already begun identifying priority stretches and has initiated tendering procedures for execution.

It has been stated that the government is determined to ensure that every rupee sanctioned under SASCI is utilised for the creation of durable public assets. Officials have been instructed to maintain strict quality control throughout the project from planning to completion and to document any deviations. Accountability measures are to be enforced against those responsible for non-compliance.

About the SASCI Scheme

The Special Assistance to States for Capital Investment (SASCI) scheme was launched in FY 2020–21 in response to the COVID-19 pandemic, with the aim of supporting capital expenditure by states through interest-free loans repayable over 50 years. No allocations were made before its introduction in 2020.

Andhra Pradesh had earlier been sanctioned ₹4,447.51 crore in February 2024 under Part-I (Untied) of the scheme, and an additional ₹172 crore under Part-VI (Unity Mall) for constructing a PM Ekta Mall in Visakhapatnam.

Tourism Projects Also Supported Under SASCI

As of August 2025, the total SASCI allocation for Andhra Pradesh across all sectors stood at ₹2,010 crore. In addition, ₹172.35 crore was sanctioned under the tourism component for two major projects in Gandikota and Rajamahendravaram.

• Gandikota: ₹77.91 crore for “Enriching the Fort and Gorge Experience.”

• Rajamahendravaram: ₹94.44 crore for “Akhanda Godavari – Havelock Bridge & Pushkar Ghat Development.”

These projects are expected to enhance the state’s tourism potential and contribute to regional economic growth.

Monitoring and Implementation Process

Implementation of the ₹2,000 crore rural roads project is to be monitored through the Public Financial Management System (PFMS) and the State Finance Department, allowing real-time tracking of fund utilisation.

Funds will be released in phases, beginning with 25–30 per cent, while subsequent tranches will depend on utilisation certificates, audit reports, and verified project progress.

The Panchayat Raj Engineering Department (PRED) and the Andhra Pradesh Road Development Corporation (APRDC) have been designated as implementing agencies. The State Finance Department will serve as the nodal agency and submit monthly progress reports to the Union Finance Ministry for review.

Future Projections and Additional Requests

A concrete projection for future SASCI allocations has not yet been made. However, the Andhra Pradesh Government has requested an additional ₹5,000 crore under the scheme for pending capital projects.

According to senior finance officials, allocations are finalised annually based on project proposals, compliance with scheme guidelines, and timely utilisation of previous grants. Efficient execution of the current allocation may improve the state’s eligibility for increased funding in future cycles.

Economic Impact Expected in Rural Areas

Economists have observed that the ₹2,000 crore investment could significantly enhance rural connectivity, providing improved access to markets, healthcare, and education, while creating local employment opportunities.

Officials have stated that the successful completion of these projects could pave the way for sustained Central assistance in upcoming financial years, strengthening Andhra Pradesh’s rural infrastructure and overall growth trajectory.

Funds for Puttaparthi Development

A portion of the funds, amounting to ₹35 crore, has been earmarked for infrastructure works in Puttaparthi, coinciding with the centenary celebrations of Sri Sathya Sai Baba. Deputy Chief Minister Pawan Kalyan has announced that he will personally review the project progress to ensure transparency and accountability in execution.

Political Significance for Pawan Kalyan

Until recently, no major achievement had been credited to Deputy Chief Minister Pawan Kalyan in the coalition government. With the sanctioning of Central funds for rural road development, an opportunity for public recognition has been created for him.

The initiative to secure ₹2,000 crore from the Centre and to oversee its proper utilisation has been taken under his leadership. Through this project, Pawan Kalyan is being viewed as a leader of action rather than words, and the move is being perceived as a decisive response to his political critics.