Despite projected GSDP rise, Maharashtra to strive hard for $1 trillion economy target

Mumbai, March 11 (IANS) Even as Maharashtra’s gross state domestic product (GSDP) is expected to be Rs 49,39,355 crore in 2025-26 from Rs 45,31,518 crore as per the revised estimate for 2024-25, the state will have to strive hard for $1 trillion economy target.

According to the state’s Medium Term Fiscal Policy statement, presented by Deputy Chief Minister and Finance Minister Ajit Pawar along with the annual Budget for 2025-26, the state government will need to step up efforts for the policy’s effective implementation to boost the economy.

The policy statement said that increasing urbanisation leads to rising demand for electricity, water supply, housing, transportation and other infrastructure facilities putting additional pressure on the state’s financial system.

The state government hopes to weather this challenge amid a rise in its tax revenue and non-tax revenue. The state’s tax revenue consists of State GST, state VAT, stamp and registration duty, state excise duty, tax on electricity, tax on vehicles, land revenue, professional tax, tax on goods and passengers, and other taxes and duties.

The revised estimate of own tax revenue for 2024-25 is Rs 3,67,467.23 crore while for the year 2025-26, the Budget estimate for the same has been fixed at Rs 3,87,673.72 crore, an increase of 5.50 per cent.

The non-tax revenue includes revenue received through interest, receipts, fines, fees, service charges, dividends, profits, royalties and deposits. The revised estimate of non-tax revenue for 2024-25 is Rs 30,143.33 crore which is expected to grow to Rs 33,052.24 crore for 2025-26.

Further, the state is banking on the devolution from the Centre which is expected to be Rs 89,726.30 crore in 2025-26 against Rs 81163.34 crore. However, the state sees a dip in grants in aid to Rs 50,511.36 crore in 2025-26 against Rs 57,692.35 crore. This puts pressure to further focus on the mobilisation of its resources to make up the difference.

Despite the government’s focus on giving a much-needed push for development works, the policy statement has expected a decrease in capital expenditure to Rs 93,165.52 crore in 2025-25 from the revised estimate of Rs 1,09,031.48 crore for 2024-25.

The policy statement underlines the time-bound implementation of a slew of infrastructure projects in a time-bound manner through various public undertakings, special purpose companies and municipal corporations while chasing the state’s ambitious target of $1 trillion.

Furthermore, the ratio of revenue receipts to revenue expenditure in 2024-25 has marginally decreased from 98.09 per cent in the Budget estimate to 92.44 per cent in the revised estimate.

According to the policy document, in 2023-24 the fiscal deficit was 2.24 per cent of GSDP which as per the Budget estimate for 2024-25 was projected at 2.59 per cent of GSDP. However, as per the revised estimate, it rose to 2.93 per cent.

Considering the growth in the economy (7.3 per cent in 2024-25), the fiscal deficit for 2025-26 has been estimated to be 2.76 per cent which is below 3 per cent of GSDP as per the Fiscal Responsibility and Budget Management Act.

The revenue deficit in 2023-24 was 0.42 per cent of GSDP but according to the Budget estimate for 2024-25, it was estimated at 0.47 per cent of GSDP but as per the revised estimate, it rose to 0.59 per cent of GSDP.

The policy statement has stressed the need to reduce the revenue deficit by increasing revenue receipts in 2025-26.

The policy statement has raised an alarm over rising administrative expenses including salaries, pension and interest payments the state government will have give more focus on prioritisation of expenditure, efficient management of public debt and effective management of limited resources to keep revenue expenditure under control.

As per the Budget estimate for 2025-26, the state’s outgo towards salaries will be Rs 1,72,000 crore against Rs 1,46,000 crore in 2024-25.

The state will have to shell out Rs 75,137 crore for pension payments and Rs 64,659 crore for interest payments in 2025-26.

(Sanjay Jog can be contacted at sanjay.j@ians.in)

–IANS

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