VIJAYAWADA: The Municipal Administration and Urban Development (MA&UD) Department has been allocated Rs 14,538.67 crore in the state budget for 2026–27, maintaining its 4.3 percent share of the total state expenditure of Rs 3,32,205.33 crore. The allocation marks a 4.87 percent increase over the previous year, with a strong emphasis on capital spending.
Of the total outlay, Rs 9,650.03 crore (66.38 percent) has been earmarked for capital expenditure, while Rs 4,888.64 crore (33.62 percent) is for revenue expenditure. The capital-heavy structure reflects the government’s focus on infrastructure creation, particularly in urban development and housing.
The Amaravati Capital City Development Project dominates the department’s allocation, receiving Rs 6,000 crore. Loans to APCRDA (Rs 836.30 crore) and APTIDCO (Rs 850 crore) further strengthen capital flows.
Finance Minister Payyavula Keshav, in his budget speech, thanked Prime Minister Narendra Modi for supporting the development of people’s capital Amaravati and also initiating the process to introduce legislation to accord statutory status to Amaravati as the permanent capital of Andhra Pradesh.
“Works are advancing at a rapid pace as funds have been tied up in a self-sustaining model from various financial institutions.
We have given administrative sanction for 97 works worth Rs 57,868 crore. This speaks volumes about the commitment of our government to build our people’s capital Amaravati,” he said.
Other major allocations include the Urban Challenge Fund (Rs 500 crore), AMRUT 2.0 (Rs 724 crore), and AIIB-supported water and septage management projects (Rs 200 crore). According to the Finance Minister, under AMRUT 2.0, as many as 506 projects are being implemented across 117 ULBs, supported by additional UIDF and AIIB-assisted projects, all targeted for completion by December 2027.
He appreciated Union Finance Minister Nirmala Sitaraman for support to facilitate an additional Rs 4,000 crore to Andhra Pradesh under UIDF spread over 2 years.
Urban sanitation also received attention, with Rs 320.30 crore under the Swachh Bharat Mission (Urban) for solid waste management, used water treatment, and capacity building.
According to budget documents, the department will channel Rs 1,562.06 crore in Finance Commission- linked grants to urban local bodies, municipalities, and nagar panchayats, strengthening decentralised financing.
Structured loans worth Rs 1,808.30 crore—including borrowings by APTIDCO, APCRDA, and Nellore Municipal Corporation—highlight the growing reliance on recoverable financing mechanisms.
Social schemes continue with allocations for the Mission for Elimination of Poverty (Rs 90 crore), DAY-NULM (Rs 40 crore), Anna Canteens (Rs 50 crore), and infrastructure in SC localities (Rs 20 crore). On the revenue side, establishment costs remain high, with over Rs 2,400 crore committed to salaries and allowances of municipal staff and ward secretaries.