Maharashtra Budget 2025-26: rising deficits, slower revenue growth cause concern

Maharashtra’s Budget for 2025-26 reveals increasing fiscal challenges, with revenue and fiscal deficits widening amid slower revenue growth. The revised estimates (RE) for 2024-25 and Budget estimates (BE) for 2025-26 indicate higher spending pressures, raising concerns over financial sustainability. According to the Budget presented by Deputy Chief Minister and Finance Minister Ajit Pawar on Monday, revenue receipts are projected to rise from ₹4,99,463 crore in 2024-25 (BE) to ₹5,36,463 crore (RE), reflecting a 7.41 per cent increase. However, for 2025-26, the growth rate slows to 4.57 per cent, reaching ₹5,60,963 crore. In contrast, revenue expenditure is increasing at a higher rate from ₹5,19,514 crore in 2024-25 (BE) to ₹5,62,998 crore (RE), an 8.38 per cent rise. The Budget for 2025-26 pegs revenue expenditure at ₹6,06,855 crore, growing by 7.80 per cent over the previous year. The revenue deficit has surged significantly, from ₹20,051 crore in 2024-25 (BE) to ₹26,536 crore (RE), marking a 32 per cent increase. It is projected to further escalate to ₹45,892 crore in 2025-26, indicating higher dependence on borrowings for revenue expenditure.

The fiscal deficit, which was pegged at ₹1,10,355 crore in the 2024-25 Budget, has shot up to ₹1,32,873 crore in the revised estimate. The 2025-26 Budget estimates it at ₹1,36,234 crore, reflecting a smaller increase, suggesting attempts at fiscal consolidation.“ The government has been successful in keeping the fiscal deficit below 3 per cent of gross State domestic income under the Fiscal Responsibility and Fiscal Management Act. Also, the State’s revenue deficit has consistently less than 1 per cent of gross State income” said Ajit Pawar. Pawar said that Maharashtra is set to announce its New Industrial Policy 2025, aiming to attract investments worth ₹40 lakh crore and generate 50 lakh jobs over the next five years. The policy will align with the new labour code introduced by the Central government. Additionally, the State plans to develop dedicated logistics infrastructure across 10,000 acres to enhance industrial growth. Maharashtra aims to cut electricity costs by ₹1.13 lakh crore over five years through energy reforms. New initiatives include the Maharashtra Technical Textile Mission, an Urban Haat Center in Nagpur, and an Innovation City spanning 250 acres in Navi Mumbai to drive economic and technological advancements.