Andhra Pradesh Chief Minister N. Chandrababu Naidu has formally requested the Union government to extend financial assistance to implement the newly-enacted Viksit Bharat-Guarantee for Rozgar and Aajeevika Mission (Grameen), or VB-G-RAM-G Act, and also urged the Centre to grant statutory status to Amaravati as the state’s capital. The appeal, made during a meeting with Union Home Minister Amit Shah in New Delhi on Wednesday, underscores the state government’s efforts to secure fiscal support while reinforcing long-term policy certainty for infrastructure and governance initiatives.

According to a statement issued by the Chief Minister’s Office (CMO), Naidu highlighted concerns regarding the financial provisions of the VB-G-RAM-G Act, particularly the revised Centre-State funding ratio of 60:40, which represents a shift from the fully-centralized funding model under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The chief minister argued that this new cost-sharing mechanism places an additional financial burden on Andhra Pradesh, potentially hindering the effective implementation of the rural employment guarantee program.

Naidu requested alternative financial support and flexibility from the Centre, taking into account the state’s current fiscal situation. The CMO statement noted that the discussions were comprehensive, covering various state-related issues and upcoming development projects, reflecting Andhra Pradesh’s broader agenda for economic recovery and rural livelihood generation.

The VB-G-RAM-G Act, which came into effect on December 21, 2025, guarantees 125 days of wage employment per year, an increase from the 100 days provided under MGNREGA. While MGNREGA was fully funded by the central government, the new law introduces the 60:40 cost-sharing structure between the Centre and the states, representing a departure from previous funding arrangements. The Act is seen as a key instrument for promoting rural employment, reducing migration, and supporting the livelihoods of economically vulnerable populations in Andhra Pradesh and across India.

During the meeting, Naidu also pressed for statutory recognition of Amaravati as the sole capital of Andhra Pradesh. The Chief Minister argued that formal legislative recognition would provide policy certainty, accelerate development in Amaravati, boost investor confidence, and fulfill the aspirations of the people of Andhra Pradesh. He urged the Centre to introduce a bill in Parliament granting Amaravati statutory capital status, emphasizing its importance for long-term administrative stability and development planning.

The push for Amaravati’s statutory recognition gained momentum after Naidu returned to power in June 2024. During the tenure of former Chief Minister Y.S. Jagan Mohan Reddy (2019–2024), the ambitious Amaravati capital project was abandoned in favor of a three-capital model: administrative capital at Visakhapatnam, judicial capital at Kurnool, and legislative capital at Amaravati. This move had led to legal disputes, which are currently under the consideration of the Supreme Court. Naidu’s proposal seeks to consolidate Amaravati as the sole capital, reversing the three-capital plan and establishing a clear statutory framework for governance and development.

The meeting between Naidu and Shah also touched upon the upcoming Union Budget 2026, likely to be presented on February 1. It is understood that the Chief Minister discussed budget allocations for Andhra Pradesh, including financial support for VB-G-RAM-G implementation, infrastructure projects, and other development initiatives critical for the state’s fiscal stability and socio-economic progress.

Naidu acknowledged the Centre’s support in helping Andhra Pradesh recover from fiscal stress and sought continued cooperation to ensure successful implementation of central schemes and development programs. He emphasized that flexibility in funding arrangements for VB-G-RAM-G would help the state meet the program’s objectives without compromising on financial prudence.

Political analysts note that the requests made by Naidu reinforce the Telugu Desam Party’s (TDP) role as a key ally of the BJP-led National Democratic Alliance (NDA), particularly in shaping policy outcomes that benefit Andhra Pradesh. The TDP’s position as the senior partner in the state underscores its ability to negotiate both central support and legislative clarity on critical issues like Amaravati’s status and rural employment schemes.

The VB-G-RAM-G Act is significant not only for its enhanced employment guarantee but also as a reflection of the Centre-State fiscal dynamics in India. The 60:40 funding model introduces new challenges for states like Andhra Pradesh, which face substantial developmental and fiscal demands. Naidu’s advocacy for alternative funding mechanisms reflects a broader effort to secure fiscal flexibility, ensuring that rural employment programs can be effectively executed without placing an undue burden on the state exchequer.

Similarly, the push for Amaravati’s statutory recognition is intertwined with economic and political considerations. A unified capital city ensures streamlined administration, better governance, and enhanced investment prospects. By seeking parliamentary approval for Amaravati, Naidu aims to provide long-term certainty for investors, developers, and citizens, countering the uncertainty caused by the previous three-capital arrangement.

In conclusion, the meeting between Andhra Pradesh CM N. Chandrababu Naidu and Union Home Minister Amit Shah highlighted two critical priorities for the state: financial support for implementing VB-G-RAM-G Act and statutory recognition of Amaravati as the state capital. The discussions reflected a balance of fiscal pragmatism, governance planning, and political strategy, with an emphasis on securing central cooperation ahead of the Union Budget 2026. The outcomes of these negotiations are expected to have a significant impact on Andhra Pradesh’s rural employment initiatives, infrastructure development, and long-term capital planning.