Maharashtra Budget 2025: Ajit Pawar’s Strategy to Tackle Debt, Review Schemes, and Spur Growth

Maharashtra Chief Minister Devendra Fadnavis with Deputy Chief Minister and Finance Minister Ajit Pawar. Although the State government claims that Maharashtra is number one in bringing foreign direct investment in country, numbers tell a different story.
| Photo Credit: ANI

In the first three days of March, Maharashtra’s financial situation was revealed: It tops the chart in the country’s State numbers for GST collection for February 2025, with Rs.30,637 crore; the State finance minister, Ajit Pawar, sought a supplementary Rs.6,486 crore on March 3. This demand was raised days before the presentation of the State budget on March 10.

Although the State is doing well compared to others, bringing in financial discipline appears to be the biggest challenge before Pawar. The Mahayuti alliance—constituted by the BJP, Eknath Shinde’s Shiv Sena, and Ajit Pawar’s Nationalist Congress Party—won back the State in the 2024 Assembly elections. But Mahayuti leaders ignored the financial situation. They spent big money: The Ladki Bahin scheme cost Rs.46,000 core (almost 10 per cent of the State’s revenue); the Tirth Darshan scheme; the Anandacha Shidha scheme (where ration was given free on special occasions); the Chief Minister Internship scheme (where 10,000 graduates were supposed to be awarded Rs.10,000 per month as apprenticeship.)

Together, these schemes cost over Rs.1 lakh crore, a jump from the Rs.85,000 crore deficit in 2022-2024, when the government cleared many infrastructure proposals in the areas of health, public work, medical education and rural development. Pawar, therefore, while presenting the budget for 2025-26, will have to demonstrate how he will bring down the deficit.

Mounting debt and budget cuts

The government appears to have made efforts to bring down the fiscal deficit: The BEAMS (Budget Estimate Allocation Monitoring System) in the finance department, for instance, shows the exact allocation of funds to each department, and also the status of the funds.

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While presenting the interim budget in June 2024, Pawar announced that over Rs.4 lakh crore would be allocated to various departments, which adds up to 54 per cent of the total budget. But on March 1, it was found that only 43 per cent—a little over Rs.3 lakh crore of the budget—has been spent so far.

There is a buzz that the State government will shut down many schemes such as Anandacha Shidha and Shiv Bhojan Thali (a mid-day meal scheme). The government is also “reviewing” the list of beneficiaries of the Ladki Bahin scheme. So far, five lakh women, were found ineligible for the scheme. Several schemes for “beautification”, announced earlier by Shinde, are likely to be stalled.

Maharashtra is now one of the highest debt-ridden States. Recently, NITI Aayog’s financial health index showed that the State’s development is marred by debt. It is expected that FY 2024-25, this debt will be over Rs.7 crore. “Between 2018-19 to 2022-23, the state’s debt has increased by on an average 9.92% per year. Right now, the state’s new loan is being used to repay the old loans,” writes NITI Aayog. Even the Prime Minister’s Economic Advisory Council has found that Maharashtra’s share in the national gross State domestic product (GSDP) decreased from 15 per cent in 2014 to 13 per cent in 2024.

Although the State government claims that Maharashtra is number one in bringing foreign direct investment in country, numbers tell a different story. The State’s economic survey tabled in June, 2024, has clearly shown that Maharashtra’s share in the service sector has reduced in the last five years. Even more shocking is manufacturing growth: Between 2019 to 2024, the State, once the country’s manufacturing hub, has seen negative growth of -1 per cent.

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The State will also have to come up with new sources of revenue. In 2024, almost 45 per cent came from GST. Taxes on vehicles and electricity were two other major components. This year, the State government, according to sources, is planning a new excise policy (Pawar also handles the excise department).

Greater investment in agriculture is also going to be an important part of the budget: Rs.35,000 crore was allocated for the sector in the 2024 budget, and a substantial increase in the sector is much-needed. Chief Minister Devendra Fadnavis is already trying to resolve the water woes of the Western Vidarbha by bringing in water from Gosikhurd in east Vidarbha, as well as by connecting the rivers of East and West Vidarbha at Rs.70,000 crore.

Pawar portrays his leadership as “disciplinarian”; this should reflect in his budget now.