From farm loan waiver to increasing the monthly allowance under the Majhi Ladki Bahin Yojana, the light purse of the ruling Mahayuti government is holding it from fulfilling its poll promises in the first year of its governance. The financial constraints have forced the government to adopt innovative means to finance large infrastructure projects such as that for the Rs 86,000 crore Nagpur-Goa Shaktipeeth Expressway, where it went ahead with providing loan guarantee worth Rs 20,787 crore for land acquisition for the project.
Earlier this year, Deputy Chief Minister and Maharashtra Finance minister Ajit Pawar presented a Rs 7-lakh crore state budget, amid rising revenue expenditure and debt stock, which had a marginal increase in capital expenditure. It not only refrained from declaring any significant new scheme but also stayed silent on fulfilling a number of poll promises made by the ruling alliance.
Expressing caution over the state’s financial condition, the finance department had even red-flagged the Rs 20,787-crore loan guarantee extended by the Maharashtra Cabinet for land acquisition for the Shaktipeeth Expressway. “It will put a financial burden on the state and the off-budget loan will impact the state’s capability to seek loan”, said a note submitted by the finance department to the Cabinet.
One of the major financial challenges facing the government was to settle over Rs 80,000 crore dues of contractors pending for over two years. “We have been spending money on settling dues and completing projects announced earlier but not completed. Therefore no new projects have been taken up,” said an official from the state’s Public Works Department. Similarly, sources confirmed that Chief Minister Devendra Fadnavis has directed the Water conservation department not to take up new projects and instead complete the ones pending.
Meanwhile,in a bid to overcome financial constraints, the state government is baiting on innovative financing options, which does not put burden on the state treasury. It involves joint ventures or private partnerships. For example, the Rs 1,299-crore cluster redevelopment project will be jointly implemented by the Mumbai Metropolitan Region Development Authority (MMRDA) and the Slum Rehabilitation Authority (SRA). The government is also planning to raise money through public-private partnership for the ambitious Marathwada water grid project, which is likely to cost Rs 40,000 crore.
The state government recently approved guarantee for loan of Rs 3,000 crore from HUDCO for land acquisition to set up the International Business and Finance Center in Nagpur. Earlier, the Maharashtra Cabinet approved borrowing of Rs 2,000 crore from HUDCO to complete projects under the Urban Infrastructure Development Loan Scheme.
A senior government functionary told The Indian Express, “There are some constraints on finance, so we are taking up financing models such a BOT (build-operate-transfer), annuity model and other innovative financing to fund plannned projects so that none of the planned projects are affected due to financial constraints. We will continue with our our infratructure-led development and we are on track for the same.”
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The election year (in 2024) sops announced by the previous Mahayuti government and its implementation mid-year had impacted the financial health of Maharashtra, increasing the revenue expenditure by Rs 87,341.15 crore over the budget estimates of 2024-25. The capital expenditure for 2025-26 has seen a marginal increase of Rs 385.89 crore over the budget estimate of Rs 92,779 crore for 2024-25.
Maharashtra’s overall debt stock rose to Rs 8,39,275 crore for 2024-25 (revised estimate) compared to Rs 7,18,507 crore in the previous fiscal. The budget estimate for 2025-26 has taken the total debt stock to Rs 9,32,242 crore, which is 18.87 per cent of the Gross State Domestic Product—the highest in the past five years.
The Budget, which mentioned the ongoing infrastructure as well as other projects in Maharashtra, had no significant new announcement. While the government allocated Rs 36,000 crore for the Ladki Bahin scheme, it made no mention of a hike in the allowance from Rs 1,500 to Rs 2,100, as promised by the Mahayuti before the Assembly polls last year.
During the poll campaign, the Mahayuti had also promised a farm loan waiver. The incessant rains and subsequent floods in Marathwada forced the state government to announce Rs 31,628-crore package for the flood-hit regions in Maharashtra. Despite the government’s tall claims, the farmer organisations have dissected it. “The real package for farmers is Rs 6,500 crore, which is additional to the NDRF norms. Including the crop insurance amount into the relief package is nothing but a cruel joke being played on farmers,” said Ajit Nawale, General Secretary of All India Kisan Sabha.
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Exploring revenue options, the state government proposed to levy motor vehicle tax at the rate of 6 per cent on electric vehicles priced above Rs 30 lakh. It also proposed to levy motor vehicle tax, compulsorily on a lump sum basis, at 7 per cent on the price of construction vehicles such as cranes, compressors, projectors and excavators as well as on the price of light goods vehicles carrying goods up to 7,500 kg. The government expects these taxes will bring an additional revenue of around Rs 1,000 crore
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