Hyderabad, Jan 9, 2026: Andhra Pradesh Chief Minister N Chandrababu Naidu has urged the Union Government to provide financial assistance to the state for implementing the newly-enacted VB-G RAM G Act, which replaces the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), while also calling for statutory recognition of Amaravati as the state capital.

The requests were made during a meeting with Union Home Minister Amit Shah in New Delhi on Wednesday evening, officials said.

Financial Support for VB-G RAM G

Naidu highlighted concerns over the revised Centre-State funding ratio of 60:40 under the VB-G RAM G Act. Previously, under MGNREGA, the central government bore 100% of the cost. The new arrangement, guaranteeing 125 days of wage employment per year (up from 100 under MGNREGA), increases the state’s financial burden, the Chief Minister noted.

“The revised funding ratio places an additional burden on Andhra Pradesh and could adversely affect the implementation of the rural employment guarantee scheme,” a statement from the Chief Minister’s office said.

Naidu requested the Centre to provide alternative financial support and flexibility, taking into account the state’s current fiscal position. He acknowledged the central government’s past support in helping Andhra Pradesh recover from fiscal stress and sought continued cooperation.

Push for Amaravati Statutory Status

The Chief Minister also pressed the case for granting statutory status to Amaravati, urging the introduction of a bill in Parliament to formally recognize it as Andhra Pradesh’s sole capital. According to Naidu, legislative recognition would accelerate development, boost investor confidence, and provide policy certainty for long-term state planning.

“Formal legislative recognition of Amaravati will strengthen investor confidence and fulfil the aspirations of the people of Andhra Pradesh,” the statement said.

This move comes after Naidu returned to power in June 2024, reversing the previous government’s proposal of a three-capital model with administrative functions in Visakhapatnam, judicial functions in Kurnool, and legislative activities in Amaravati. The matter remains under Supreme Court review.

Context: VB-G RAM G Act

The Viksit Bharat-Guarantee for Rozgar and Aajeevika Mission (Grameen), or VB-G RAM G Act, came into effect on December 21, 2025, following the passage of the bill in both Houses of Parliament and the President’s assent. Key features of the act include:

• Guaranteed 125 days of wage employment per year for rural households.
• Cost-sharing structure of 60:40 between Centre and state, instead of the earlier 100% central funding.
• Focus on expanding rural livelihood and social security.

Naidu emphasized that effective implementation of the scheme would require flexible funding support from the Centre, especially in a state with large rural populations and ongoing development projects.

Ahead of Union Budget 2026

The meeting also reportedly touched on allocations for Andhra Pradesh in the upcoming Union Budget, likely to be presented on February 1, 2026, highlighting the importance of financial planning for both rural employment programs and infrastructure projects in the state.

Political Context

The VB-G RAM G Act is a flagship rural employment program, reflecting the Centre’s and states’ joint commitment to social welfare. Andhra Pradesh, under Naidu, has consistently pushed for greater Centre-State coordination in policy and funding. The statutory recognition of Amaravati has been a politically sensitive issue since Naidu’s return to power, as it contrasts with the three-capital proposal by the previous YSR Congress government, now pending Supreme Court adjudication.