Andhra Pradesh Gets Special Financial Support in Budget 2024-25

In a significant move for the southern state of Andhra Pradesh, Finance Minister Nirmala Sitharaman announced a special financial support package during her Budget 2024-25 presentation. The government will allocate Rs 15,000 crore specifically aimed at the development of the state’s capital.

During her speech, Sitharaman emphasized that this amount is not just a one-time allocation. “In the current financial year, Rs 15,000 crore will be arranged, with additional amounts in future years. We will facilitate financial support through multilateral agencies,” she stated, indicating a long-term commitment to supporting the state.

The announcement has been met with enthusiasm from various political parties in the state. Notably, Telugu Desam Party (TDP) chief Chandrababu Naidu, a prominent ally in the Modi 3.0 government, has expressed support for these initiatives. His party has been vocal about the need for enhanced financial assistance to ensure the rapid development of Andhra Pradesh.

Following the budget announcement, the stock market reacted positively to the news. Shares of companies that are linked to Andhra Pradesh saw significant gains. Andhra Cements, for instance, was locked at the 5 per cent upper circuit limit on the Bombay Stock Exchange (BSE), trading at Rs 98.97. This surge came with impressive trading volume, with around 15,000 shares changing hands and pending buy orders for over 6,800 shares.

KCP Limited also saw a remarkable rise, with shares climbing by 5.7 per cent to reach Rs 259.50. Other companies associated with Andhra Pradesh, such as Likitha Infrastructure and NCL Industries, also enjoyed a boost, each climbing over 4 per cent this week in the wake of the budgetary announcements.

Additionally, KNR Constructions recorded a 3 per cent gain, while Deccan Cements and Sagar Cements both rose by 2 per cent. Investors were optimistic, anticipating that the government’s financial support would accelerate growth and development in the region.

However, not all stocks enjoyed the same fate. On the flip side, Andhra Petrochemicals and NMDC saw a decline, each plunging around 4 per cent. Meanwhile, Andhra Sugars and KNR Constructions also faced downturns, dropping nearly 3 per cent each amid the broader market fluctuations.

As the focus shifted to overall market health, it became apparent that the benchmark domestic equity indices—the BSE Sensex and the NSE Nifty—were not faring well post-budget speech. The BSE Sensex witnessed a drop of over 1 per cent, losing significant ground. The index gave up its 80k levels, falling to a day’s low of 79,224.32, a concerning signal for investors looking for stability.

By midday trading, the Sensex was down to 80,010.94, reflecting a decline of 491.14 points or 0.61 per cent. The Nifty50 also faced challenges, trading at 24,295.20, down 214.05 points or 0.87 per cent.

The mood in the broader markets was equally grim, with indices plunging over 4 per cent. Among the hardest hit were railway stocks, which tumbled by up to 9 per cent, raising concerns about the overall sector’s performance amid the market’s reaction to the budget.

Overall, while the financial support for Andhra Pradesh marks a significant commitment from the Modi government, the mixed performance in stock prices and the broader market reflects the ongoing uncertainties that investors face.