State’s revenue falls, only 67% of outlay used

Maharashtra's revenue for FY25–26 fell short by ₹41,000 crore, impacting capital expenditure and development due to underperformance in key sectors.

MUMBAI: Even as debt and fiscal deficit rose sharply in the last two years, Maharashtra’s revenue in FY25–26 fell significantly across key heads — Goods and Services Tax (GST), excise duty, motor vehicle tax, and stamp duty and registration of properties. This led to a revenue shortfall of around ₹41,000 crore against budget estimates, slowing capital expenditure and development projects.

State’s revenue falls, only 67% of outlay used

Provisional figures at the end of the financial year put total revenue receipts at ₹5.60 lakh crore, falling short of the revised estimate of ₹6.01 lakh crore from a budget estimate of ₹5.60 lakh crore, largely due to underperformance by major departments.

Stamp duty and registration collections were ₹61,283 crore, below the budget estimate of ₹63,500 crore and revised estimate of ₹68,032 crore. Excise duty collections were ₹30,500 crore, missing the budget target of ₹32,575 crore and revised estimate of ₹34,169 crore by over ₹2,000 crore.

GST collections, at ₹2,51,256 crore, marginally exceeded the budget estimate of ₹2,50,519 crore but remained below revised projections ₹2,57,910. Similarly, vehicle tax collection was ₹16,100 crore, more than the budget estimate of ₹15,606 crore but well below the revised estimate of ₹17,089 crore.

Officials attribute the shortfall to a slowdown in key sectors and “overambitious targets”. According to an official with the state finance department, “Excise targets were unrealistic despite hikes in liquor rates. A slowdown in real estate hit stamp duty collections in March, a crucial month. Even against revised estimates, collections were weak.”

The revenue gap has impacted overall spending. The state utilised only 67.7% of its total budget outlay for FY25–26, spending ₹6.83 lakh crore against ₹9.24 lakh crore. Department-wise, industries, rural development and urban development spent over 80% of allocations, while the environment and housing departments spent less than 45%.

Social sector departments including women and child welfare, social justice and tribal development recorded 74–83% utilisation, largely driven by the state’s Ladki Bahin scheme, which entails a monthly outgo of over ₹3,600 crore.

Despite record borrowings exceeding ₹1.38 lakh crore, capital expenditure was curtailed at ₹98,000 crore against the budgeted ₹1.17 lakh crore, with payments to contractors deferred. Of the total borrowings, over ₹62,031 crore went towards interest payments.

Supplementary demands expanded the budget size beyond the initial ₹7.2 lakh crore. Anticipating revenue stress, the finance department imposed expenditure cuts of up to 30% in January. While committed expenditure — salaries, pensions and establishment costs — was protected, cuts were implemented across discretionary heads such as utilities, office expenses, fuel, overtime and professional services.

Officials indicated that final figures may improve after reconciliation. “Revenue receipts could rise by over ₹20,000 crore, aided by ₹10,000 crore from the centre under the 15th Finance Commission, and ₹1,700 crore GST collections on the last day of the fiscal,” an official said. Total expenditure may also increase by 4–5% after accounting for repayments and interest booked through the Reserve Bank of India and reflected in accountant general reconciliation.

Rupesh Keer of Samarthan, an NGO tracking the state’s finances, said overall spending declined from earlier levels of over 80% due to inflated budgets unsupported by resources. “Reduced capital expenditure is a concern as it dampens economic growth. The revenue shortfall will have a cascading impact next year, leading to higher borrowings and lower development spending.”