Priyanka Tiwari
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Ajit Pawar, the Deputy Chief Minister and Minister of Finance, is going to declare the Maharashtra Budget for the fiscal year 2025 - 26 within the corridors of the assembly today. This budget will be the first comprehensive budget of the Mahayuti government which assumed the reins of power during the tail end of the last year, as well as the 11th budget in his career as the state’s finance minister and Pawar.
The budget comes against the background of Maharashtra's economic growth rate being projected at 7.3% for the year 2024-25 which is greater than the national average of 6.5%. But the state continues to face fiscal constrains due to increasing debt, growing expense on welfare benefits and a fiscal deficit.
Key Highlights to Watch For
A comprehensive approach: Growth versus economic strain
According to midpoint estimates for 2024 - 2025, Maharashtra is set to increase its economic growth rate to 7.3%.
There has been noticeable slowdown in services and industrial sectors which are expected to grow by 4.9% and 7.8%, respectively.
A projection of 8.7% growth can be observed in real gross state value added (GSVA) from agriculture and other related activities.
Debt for the state is predicted at ₹7.8 lakh crores for the year 2024 - 2025 accompanied by a growing concern of fiscal deficit soaring beyond the 3% mark of GSDP.
Welfare Schemes: What is Coming
The Mukhya Mantri Majhi Ladki Bahin Yojana has paid 17,505.90 Crores to over 2.38 crore recipients until December 2024.
It is very probable that Government will not increase the Ladki Bahin stipend from Rs 1500 to Rs 2100, even though Mahayuti made that promise during the elections.
The Government is likely to reshape and reshape social welfare payments in terms of the number of people that benefit to cope with financial constraints.
“The Chi 2024‘ proposed budget by CM Devendra Fadnavis does include an increase of the Namo Shetkari Samman Nidhi for farmers, from 6000 to 9000 per annum.”
Fiscal Challenges: Increase of Deficit and Debt Load
Maharashtra started the elections with a financial burden because of the social welfare schemes worked out to 96,000 Crores.
Post elections proposals for additional activity financing is at an astonishing value of 1.37 lakh Crores which is the highest in the history of the state.
Concern around the fiscal deficit has shot up with figure at 1.1 Lakh still a lot of it waiting till October 2024.
According to the PM Economic Advisory Council, Maharashtra’s share of GDP contribution as a state declined from 15.2% to 13.3% from 2010-11. to 2023-24
Government Comments on Economy
Eknath Shinde, the CM has been open to reports that the budget shall focus on the common man with continued emphasis on social welfare.
The official stance is that there will not be any fundamental changes to how financial problems are handled.
Fadnavis has pointed out the investment possibilities in the state of Maharashtra by mentioning the MoUs of Rs 15.78 lakh crore fetched at the World Economic Forum along with RBI statistics that positioned Maharashtra as the leading state regarding FDI for the past nine months.
Predictions Based On Various Sectors
The anticipated increase in manufacturing is expected to be around 4.2%, a drop from the 6.8% growth in 2023-24.
The anticipated increase in electricity, gas, and water supply is also lower than the previous rate of 8.1%. This is expected to grow by 6.5% in 2024-25.
Despite the general slowdown in the industry, the construction industry has been able to improve.
The revenue receipts for Maharashtra still continue to be under strain as 55% of this revenue is earmarked for committed expenditures like salaries (32%), pensions (12%), and interest payments (11%).
These elections are budgeted for right before the vital local body elections for big cities, which are Mumbai, Pune, Nagpur, Thane, and so on.
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