The economic survey of Maharashtra for the past year and the budget presented by state finance minister Ajit Pawar for the coming financial year show an economic picture of the state that cannot be described as happy or satisfactory. The budget presented on Monday has a revenue deficit of over Rs. 45,000 crores, which means the state is going to have hardly any resources for big development projects. Almost half of the state’s revenue is going to be spent on just establishment costs and meeting the debts, which are now at an all-time high. All this shows a grim picture, and considering the fact that in the last election the BJP-led Mahayuti scored high, mainly on the basis of the Direct Benefit Transfer Schemes or DBT, which was nothing but a financial reward for certain classes of society, if the financial burden goes beyond control, it means the Mahayuti could face a political impact of this situation.
Maharashtra is now one of India’s largest states in terms of its finances. It has an annual budget of about Rs 7 lakh crore. The state contributes around 15% of the nation’s GDP, which makes it a leading centre of financial and industrial activities. But numbers in the budget show that Maharashtra will be facing many big challenges in the coming years. In the economic survey of the state, the growth of industry and manufacturing has been very disappointing, and the main engine which drove the economy in the last year has been agriculture. This, against the backdrop of current investments and stock market scenarios, seems a scary scene, as the state may see even negative growth in the coming months! The biggest challenge seems to be attracting new investment in the manufacturing and even services sectors, and there seems to be overdependence on traditional sectors like agriculture and retail trade.
State finance minister Ajit Pawar stressed how new infrastructure, especially roads and highways, would be the engines of growth in the coming years, as he announced the creation of new projects in the fresh budget. However, former finance minister and opposition leader Jayant Patil, while speaking with the media, claimed that the state would have no funds for the creation of new highways and roads in the coming months. The current situation, according to the opposition, is that many mega projects, such as the Mumbai-Nagpur Samruddhi highway, remain underutilised at present. Doubts are being raised whether such mega highway projects will be sustainable in the future through the public-private partnership if the toll collection on the roads does not meet the expected numbers in the coming years. The finance minister spoke about the creation of a third airport for Mumbai near the Wadhwan port, which is a Rs 70,000 crore project designed to come up in the next few years. Many feel this is an extremely over-ambitious thought by Pawar when the second airport for Mumbai, coming up at Navi Mumbai itself, is yet to be operational and may provide passenger handling capacity, which will be much beyond the currently projected requirements for the next two decades!
While the state finance minister focused heavily on the creation of high-end infrastructure like multi-lane mega highways and airports, what, according to the opposition, was missing was the focus on agriculture. The Mahayuti had promised some kind of a loan waiver for farmers during their assembly election campaign, but not one word about that was uttered by the minister. Also, the provision of just over Rs 33,000 crore for the flagship Mukhyamantri Ladki Bahin Yojana raised many eyebrows, as the figure itself made it clear that the number of beneficiaries would be drastically cut compared to the previous year. Last year, the finance minister had allocated around Rs 43,000 crore for the period from July 2024 to March 2025. This year, for the period of April 2025 to March 2026, the figure has been reduced by over Rs 10,000 crore, which makes it very obvious that the beneficiaries would be fewer than last year.
It is clear that from agriculture (which, according to the government, had been the main driver last year) to DBT, in every crucial area, the government has to cut allocation, and that is a reflection of poor economic conditions, rising debt and financial stress. As the government is unable to fulfil the promises made to the public during the election season of 2024, it will have some serious political impact in the upcoming civic and district council polls in Maharashtra. The trend seen in assembly polls in other states, such as Madhya Pradesh, of people voting for a particular political alliance because of getting direct financial benefits from the government was experienced in Maharashtra too in the last polls. However, it would not take much for this to backfire. If farmers and women from weaker economic sections stop getting financial benefits because of economic stress, the opposition will be quick to take the issue to the masses, and it may become difficult for the ruling parties to face the backlash from the public.
Rohit Chandavarkar is a senior journalist who has worked for 31 years with various leading newspaper brands and television channels in Mumbai and Pune.
