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Andhra Pradesh cabinet clears 2 new districts, to seek ₹7.3K-cr NABARD loan
Briefing reporters after the Cabinet meeting at the state secretariat, revenue minister Anagani Satyaprasad said the reorganisation involved changes in 17 of the existing 26 districts, covering 25 modifications.
The Andhra Pradesh Cabinet, chaired by chief minister N Chandrababu Naidu, on Monday approved the reorganisation of districts in the state, creating two new districts — Markapuram and Polavaram — thereby raising the total number from 26 to 28.
Briefing reporters after the Cabinet meeting at the state secretariat, revenue minister Anagani Satyaprasad said the reorganisation involved changes in 17 of the existing 26 districts, covering 25 modifications.
“No changes were proposed in Vizianagaram, Parvathipuram Manyam, Visakhapatnam, Eluru, NTR, Krishna, Guntur, Palnadu, and Anantapur districts,” he said.
The Cabinet decided to form two new districts — Polavaram, with Rampachodavaram assembly constituency as its headquarters, and Markapuram, comprising the Markapuram, Kanigiri, Yerragondapalem, and Giddaluru blocks. “Polavaram village will be developed as a revenue division in the future,” the minister added.
Although a proposal for a separate Madanapalle district was discussed, the Cabinet concluded that Rayachoti could not be designated as a district. Instead, Madanapalle will become the district headquarters of Annamayya district, replacing Rayachoti, Satyaprasad said.
The revisions were made after considering public objections and suggestions received following the gazette notification issued on 27 November 2025. The government accepted inputs until 27 December 2025, after which the final notification will be issued. All changes will come into effect from December 31 2025, he said.
The Cabinet also approved a proposal to secure a ₹7,387.70-crore loan from the National Bank for Agriculture and Rural Development (NABARD) under the NABARD Infrastructure Development Assistance (NIDA) scheme for infrastructure projects in the Amaravati capital region. The loan will be subject to a 5% guarantee fee, the minister informed.
Approval was also given to award the contract to the lowest bidder for construction, testing, commissioning, and 15-year operation and maintenance of Flood Pumping Station-2 at Undavalli, with a capacity of 8,400 cusecs, under the Amaravati Capital City Development Programme funded by the World Bank and the Asian Development Bank (ADB). The project is valued at ₹443.76 crore.
Similarly, the Cabinet cleared the lowest bid for trunk infrastructure works, including roads, drains, water supply, sewerage, power, ICT ducts, reuse water lines, STP, and avenue plantation, in Zone-8 villages of Krishnayapalem, Venkatapalem, Penumaka, and Undavalli at a cost of ₹1,358 crore. The works carry a two-year defect liability period. The Cabinet further approved a 3.64% increase in dearness allowance for state employees and pensioners, effective from January 1, 2024.
The DA has thus been revised from 33.67% to 37.31%, with the monetary benefit payable from October 2025 salaries.
An ordinance will be promulgated to amend the Andhra Pradesh Village and Ward Secretariats Act, 2023, allowing a change in the nomenclature of village and ward secretariats.
The Cabinet also approved another ordinance to introduce a 10% Road Safety Cess on life-tax-applicable motor vehicles by amending the Andhra Pradesh Motor Vehicles Taxation Act, 1963.
The cess proceeds will be transferred to the AP Road Development Corporation and used exclusively for road improvement, safety measures, and reducing accidents and fatalities. “With around 73,000 new vehicle registrations every month, the cess is expected to generate ₹22.5 crore per month and ₹270 crore annually,” Satyaprasad said.
The government said the additional burden on vehicle owners would be minimal, particularly after the Centre reduced GST on motor vehicles from 28% to 18%. As the Assembly is not in session, the Cabinet approved promulgation of an ordinance instead of introducing a bill.
