In a huge relief to the Andhra Pradesh government, the Union Cabinet has approved Rs 12,157 crore to complete the first phase of the Polavaram project prompting Chief Minister N Chandrababu Naidu to describe it as a sign of “trust” and “assurance” to the people of AP.

The Cabinet also approved two industrial smart cities for the state. Expressing his gratitude to Prime Minister Narendra Modi and his Cabinet colleagues, Naidu called it a ‘positive beginning’ for the state.

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The funds for Polavaram will be released in two tranches, Rs 6,000 crore in 2024-25 and another Rs 6,157 crore in 2025-26 and the project is scheduled to be completed in March 2027.

Naidu had visited New Delhi on 17 August in a bid to expedite the process for the release of Central funds. He had met the prime minister, Finance Minister Nirmala Sitharaman, Union Home Minister Amit Shah, and Jal Shakti Minister CR Patil and urged Prime Minister Modi to approve the proposals submitted by the state for the construction of the first phase of the project which had been stalled after a flood in the river Godavari damaged the diaphragm wall of the project considered to be the lifeline of the state.

The project cost had gone up steeply due to the delay. The chief minister also blamed the previous government’s policy of reverse tendering for the challenges faced by the project. With the Union Cabinet approving the release of funds the government can start the task of rebuilding the diaphragm wall following the advice of the international experts who examined the project.

The state is currently teetering at the brink of bankruptcy with the new government failing to even present a full-fledged Budget so far. The Sitharaman had mentioned the Polavaram project in her Budget speech though she didn’t mention the exact amount to be sanctioned. The state will get another Rs 15,000 crore to complete the construction of Amaravati as its capital city. TDP’s 16 MPs are crucial for the survival of the Modi government at the Centre.