Mahayuti avoids populist schemes in the first budget after returning to power

The Devendra Fadnavis government refrained from announcing any new schemes or fulfilling the promises it had made in its manifesto for the assembly elections

Mumbai: Four months after winning the Maharashtra assembly elections on the back of a slew of populist schemes, the Mahayuti government’s first budget after retaining power reflected an estimated debt of ₹9,32,242 crore for the financial year 2025-26, which is the highest in the state’s history. The budget also estimates a fiscal deficit of a whopping ₹1.36 lakh crore and a revenue deficit of ₹45,892 crore, which are unprecedented and even higher than during the Covid-19 period.

Mumbai: Maharashtra Deputy Chief Minister Ajit Pawar and MoS for Finance Ashish Jaiswal arrive to present the state Budget 2025-26 during the Budget session, in Mumbai, Monday, March 10, 2025. (PTI Photo) (PTI03_10_2025_000234B) (PTI)

Populist schemes worth ₹96,000 crore announced in last year’s budget in June, weeks after the Mahayuti alliance received a drubbing in the 2024 Lok Sabha elections, have left the state’s economy bleeding. This appears to have stopped the Devendra Fadnavis government from announcing any new schemes or fulfilling the promises it had made in its manifesto for the assembly elections, including a loan waiver to farmers and increasing the monthly allowance for women under the Majhi Ladki Bahin scheme to ₹2,100 from ₹1,500.

Ajit Pawar’s 11th budget as finance minister, worth ₹7 lakh crore, was largely a wrap-up of ongoing infrastructure projects and social welfare schemes or announcements that did not need major funds. The Mumbai Metropolitan Region (MMR) expectedly received the biggest push, with the state government announcing that it will be developed as a “growth hub” with seven international business centres.

Lauding the budget, chief minister Fadnavis said, “It is a balanced budget, despite being a tremendous economic stress due to the populist schemes. We have kept the fiscal deficit and the debt rate well within the limits of the norms. Maharashtra has been on the top position in GST collection, foreign direct investment and the number of startups.” The Opposition, however, slammed the budget, with Shiv Sena (UBT) chief Uddhav Thackeray calling it “the most sham budget in history” and a “Ladka (beloved) Contractor budget”.

Maharashtra’s GSDP for FY25-26 is expected to be ₹49,39,355 crore, which is higher than the revised estimates of ₹45,31,518 crore for the previous year but nowhere near enough to fulfil the Mahayuti government’s dream of making the state a $1 trillion economy by the end of the decade, for which the GSDP needs to be over ₹87 lakh crore at the current exchange rate. “Our GSDP is rising at 7.5%, against the country’s rate of 6.4%. Barring two Covid-19 years, it has been increasing by ₹4-5 lakh crore every year,” said Fadnavis.

The state government has revised its revenue receipts estimates for FY24-25 from ₹4.99 lakh crore to ₹5.36 lakh crore, while the revenue expenditure for the year has been revised to ₹5,62,999 crore from ₹5,19,513 crore. The actual revenue receipts released in the budget books for FY23-24 are ₹4,30,596 crore, as against ₹4,86,116 crore. For FY25-26, the budget estimate for revenue receipts is ₹5,60,963. Similarly, the expenditure in the revised estimates for FY23-24 was ₹5,05,647 crore, while the actual expenditure was just ₹4,44,350 crore.

In a bid to mop up some revenue, Pawar increased the motor vehicle tax on four-wheelers running on CNG/LPG by 1% and imposed a 6% tax on high-end electric vehicles costing ₹30 lakh and above. “We are increasing tax only on those who can afford it today. Only the EVs that cost above ₹30 lakh will be charged the 6% tax,” Pawar told reporters later. The budget also proposes increasing the stamp duty on supplementary documents from ₹100 to ₹500.

The budgetary allocation for capital expenditure for FY25-26 is ₹84,457 crore, which is a little over 12% of the state budget. Capital expenditure has been taking a backseat due to the government’s changed priorities. For example, the government could spend only ₹72,573 crore against the estimated allocation of ₹85,657 crore in the revised estimates for FY23-24. It was ₹13,084 crore or over 15% of the budgetary allocation.

The revenue and fiscal deficit in FY24-25 increased to ₹26,536 crore from ₹20,051 crore and to ₹1.33 lakh crore from ₹1.10 lakh crore, respectively. This is believed to be the result of the populist schemes. In FY25-26, the revenue and fiscal deficit are estimated to be an unprecedented ₹45,892 and ₹1.36 lakh crore, respectively.

To keep the fiscal deficit less than 3% of the GSDP as per the Fiscal Responsibility and Budget Management Act, the state government has decided to not increase the benefit amount under the Ladki Bahin scheme from ₹1,500 to ₹2,100, as announced in the Mahayuti’s election manifesto.

“The manifesto is for five years, and we are committed to implementing it in the next five years. It will be increased at an appropriate time,” said deputy chief minister Eknath Shinde. The state government has made a budgetary allocation of ₹36,000 crore for the Ladki Bahin scheme. It has already spent ₹33,232 crore on the scheme in FY24-25.

The budgetary allocation for the flagship scheme has come down from ₹46,000 crore in FY24-25. The government said this was according to the number of beneficiaries and could be increased anytime during the fiscal year. “If need be, it could be increased through supplementary budget,” said Fadnavis.

In terms of government departments, the budget allocation for the women and child development was the highest at ₹31,907 crore, followed by energy ( ₹21,534 crore), public works ( ₹19,079 crore), water resources ( ₹15,932 crore), rural development ( ₹11,480 crore), and agriculture ( ₹9,710 crore).

Among other highlights, Pawar said the state government will announce a new industrial policy for 2025 soon, targeting investments worth ₹40 lakh crore and the generation of 5 million jobs in the next five years. India’s financial capital and its satellite towns will get seven international business centres—at the Bandra Kurla Complex, Kurla-Worli, Wadala, Goregoan, Navi Mumbai, Kharghar and Virar-Boisar. The objective, said Pawar, is to increase the Mumbai Metropolitan Region’s GDP from the current $140 billion to ₹300 billion by 2030 and to $1.5 trillion by 2047.

The Opposition slammed the budget, with Shiv Sena (UBT) chief Thackeray saying, “The announcement related to the infrastructure projects are for the wellbeing of contractors and not meant for the general public. It is a Ladka (beloved) Contractor budget after presenting the Ladki Bahin (beloved sister) budget last year. There is nothing for farmers, women and the common man. There is no announcement of farm loan waivers or financial aid for BEST, the public transport corporation.”

Rupesh Keer, a member of NGO Samarthan, which studies the state budget, said, “The government has been speaking about making the state a $1 trillion economy, but the disparity between rural and urban population is widening. Mumbai’s per capita income is ₹4.99 lakh, while that of the backward Nandurbar is ₹1.32 lakh, leaving a gap of over ₹3.5 lakh. The state spending on capital expenditure is less than 15%, and the state government is talking about generating 50 lakh jobs in the next five years. The projections are simply superficial.”