Maharashtra budget: Petrol and diesel to be cheaper by 65 paise and ₹2.07 in Mumbai, women to get ₹1,500 per month
Presenting his first full budget as finance minister in the Mahayuti government, Pawar also announced free higher education for girls from weaker sections, waiver of farmers’ electricity bills, and an apprenticeship scheme with a monthly stipend of ₹10,000 for 1 million young people
With around three months to go before the assembly elections, deputy chief minister Ajit Pawar on Friday announced a slew of populist measures in the state budget for 2024-25, including a reduction in tax on petrol and diesel by 65 paise per litre and ₹2.07 per litre, respectively, in Mumbai, a monthly allowance of ₹1,500 for women aged 21-60 from families with a monthly income of up to ₹2.5 lakh, and three free cooking gas cylinders a year for 5.2 million families.
Presenting his first full budget as finance minister in the Mahayuti government, Pawar also announced free higher education for girls from weaker sections, waiver of farmers’ electricity bills, and an apprenticeship scheme with a monthly stipend of ₹10,000 for 1 million young people.
After winning just 17 out of the 48 Lok Sabha seats in Maharashtra, the Mahayuti is now trying to woo various sections of society ahead of the assembly polls. This is evident in the ₹6,12,293 crore state budget, with a revenue deficit of ₹20,151 crore and a fiscal deficit of ₹1,10,355 crore. The populist schemes will put an additional burden of over ₹96,000 crore on the state exchequer. Significantly, the state’s debt burden is estimated to go up to ₹7,82,991 crore in 2024-25, from ₹7,11,278 crore in 2023-24.
The annual Gross State Domestic Product (GSDP) at current prices for 2024-25 is expected to grow by 5.53% to ₹42,67,771 crore, as against ₹40,44,251 crore recorded in 2023-24. This is estimated on account of an uptick in economic growth. Fiscal deficit as against the GSDP in 2023-24 (revised estimate) is 2.77%, which is estimated to be 2.59% of the GSDP.
The budget expected a revenue deficit, as the estimated revenue receipts are ₹6,00,994 crore and the projected expenditure is ₹6,12,293 crore. The whopping rise in expenditure at the end of 2023-24 (revised estimates or RE) from the budget estimates (BE) drawn at the beginning of the year led to a heavy rise in borrowing. The RE of the expenditure rose to ₹6,00,498 crore from ₹5,47,450 crore.
An exponential growth in Goods and Services Tax (GST) and value-added tax (VAT) on petrol and diesel over the last two financial years after Covid-19 has led to a significant rise in the state’s revenue receipts. Against the BE of 2023-24, the RE was ₹4,86,116 crore that year, against the actual receipts of ₹4,05,678 crore in 2022-23. The BE for the current fiscal is ₹4,99,463 crore.
The capital expenditure in the state budget has always taken a backseat, which was the case this time, too. It decreased to ₹92,780 crore, which is just 15.15% of the budget size. The actual spending on the capital expenditure in 2022-23 was ₹66,308 crore, against the RE of ₹77,396 crore, which dipped by 14.33%. The actual capex in 2022-23 was just 11.04% of the budget size.
Major sops
Pawar announced a reduction in VAT on petrol and diesel by 1% and 3%, respectively. As such, petrol will be cheaper by 65 paise and diesel by ₹2.07 per litre in Mumbai, Thane and Navi Mumbai, where it is costlier than other parts of the state. Chief minister Eknath Shinde said that the price change will come into effect on July 1.
Under the Mukhyamantri Majhi Ladki Bahin Yojna, adopted from the Madhya Pradesh government’s Mukhyamantri Ladli Behen Yojna, the state will provide financial assistance of ₹1,500 per month to women aged 21-60. Women whose annual family income is not more than ₹2.5 lakh, whose domicile is in Maharashtra, and none of their family members are income tax payees, government employees, MPs, or MLAs are eligible for the scheme, according to a government resolution issued late on Friday. The government will spend ₹46,000 crore on this scheme every year.
Pawar also announced that the state government will completely reimburse the education and examination fees of girls from economically weaker sections and other backward classes with a family income of up to ₹8 lakh. This includes admission to professional degree/diploma courses in engineering, architecture, pharmacy, medicine and agriculture for an estimated 205,000 girls. Other sops include three free cooking gas cylinders to be given yearly to an estimated 5.2 million households in the form of cash subsidies, and finance to 10,000 women in 17 cities to buy e-rickshaws.
Pawar unveiled the Mukyamantri Baliraja Vij Savlat Yojna, under which the government has decided to waive farmers’ electricity bills and provide free electricity to agriculture pumps up to 7.5 horsepower capacity. This is expected to help 4.4 million farmers and cost ₹14,761 crore. For the free electricity, the state also aims to provide solar pumps to 850,000 farmers at a cost of ₹15,000 crore.
For distressed farmers, ₹5,000 per hectare would be given as compensation to cotton and soybean cultivators, ₹2,000 crore has been allotted to procure onions from farmers, and the ₹5 per litre subsidy for milk-producing farmers will continue.
Pawar also announced the Mukhyamantri Yuva Karyaprashikshan Yojana, an apprenticeship scheme for on-the-job training in industrial and non-industrial establishments for 1 million young people every year. Each trainee would be given a stipend of up to ₹10,000 per month. This will cost the state exchequer ₹10,000 crore. Besides, 500 industrial training institutes would be upgraded at a cost of ₹2,307 crore under a World Bank-assisted skill development project, Pawar said. The budget also attempts to woo minorities by announcing scholarships for students seeking to pursue higher education in other countries.
In a bid to please members of the warkari sect, which has a huge following in rural Maharashtra, the government announced it would sponsor each of the dindis (processions to the famous Lord Vitthal temple in Pandharpur) by paying ₹20,000. A corporation would also be set up to look after the dindi arrangements.
‘Indisciplined budget’
While Shinde described the budget as all-inclusive and aimed at the state’s overall development, the opposition Maharashtra Vikas Aghadi said it was a series of announcements that the ruling parties do not intend to fulfil.
“It is an indisciplined budget, as the revenue deficit that went up to ₹1.30 lakh crore owing to the supplementary demands of over ₹1.05 lakh crore in 2023-24, has been shown as ₹20,000 crore. The budget has been presented without any assessment of the fiscal health of the state,” said former finance minister and state NCP (SP) chief Jayant Patil.” He added that Pawar had himself said in his budget speech that a high-level committee would be formed to evaluate the schemes and rationalise them, which means most announcements have been made without budgetary allocation.
Pawar, however, insisted that all the announcements would be implemented. “This is my 10th budget as finance minister [in various governments). I know how to fulfil the promises,” he said.