Synopsis
Maharashtra's GSDP is projected to rise to Rs 49,39,355 crore by 2025-26, but the state faces challenges in reaching its ambitious $1 trillion economy goal. The government's fiscal policies emphasize revenue growth and infrastructure development critical for sustaining economic growth.Key Takeaways
- Maharashtra's GSDP is rising but needs more efforts to achieve $1 trillion economy.
- Increasing urbanization is straining financial resources.
- Tax revenue is projected to grow by 5.50%.
- Need to address rising administrative expenses and manage public debt effectively.
- Focus on timely execution of infrastructure projects.
Mumbai, March 11 (NationPress) Although Maharashtra's gross state domestic product (GSDP) is projected to reach Rs 49,39,355 crore in 2025-26, up from Rs 45,31,518 crore according to the revised estimate for 2024-25, achieving the ambitious $1 trillion economy goal will require significant effort.
The state's Medium Term Fiscal Policy statement, unveiled by Deputy Chief Minister and Finance Minister Ajit Pawar along with the annual Budget for 2025-26, emphasizes the need for the government to enhance its strategies for effective policy implementation aimed at economic growth.
This policy statement highlights that the increasing rate of urbanization is driving the demand for essential services such as electricity, water supply, housing, and transportation, which places additional strain on the state's financial resources.
The state government is optimistic about overcoming these challenges, backed by a rise in its tax and non-tax revenues. The tax revenue comprises various sources, including State GST, state VAT, stamp and registration duties, state excise duties, taxes on electricity, vehicles, land revenue, professional tax, and other duties.
The revised estimate for the state's own tax revenue for 2024-25 stands at Rs 3,67,467.23 crore, while the budget estimate for 2025-26 is set at Rs 3,87,673.72 crore, indicating a growth of 5.50 percent.
Non-tax revenue consists of income from interest, fees, service charges, dividends, and royalties. The revised estimate for non-tax revenue for 2024-25 is Rs 30,143.33 crore, anticipated to increase to Rs 33,052.24 crore in 2025-26.
Moreover, the state is relying on devolution from the central government, projected at Rs 89,726.30 crore for 2025-26, compared to Rs 81,163.34 crore previously. However, a decline in grants in aid to Rs 50,511.36 crore in 2025-26 from Rs 57,692.35 crore adds pressure to mobilize additional resources.
Despite the focus on stimulating development projects, a decrease in capital expenditure is anticipated, dropping to Rs 93,165.52 crore in 2025-26 from the revised estimate of Rs 1,09,031.48 crore for 2024-25.
The policy statement emphasizes the need for timely execution of numerous infrastructure initiatives through public undertakings and special purpose companies, all while pursuing the state's ambitious $1 trillion goal.
Additionally, the ratio of revenue receipts to revenue expenditure in 2024-25 is observed to have slightly declined from 98.09 percent in the budget estimate to 92.44 percent in the revised estimate.
The policy document indicates that the fiscal deficit for 2023-24 was 2.24 percent of GSDP, projected at 2.59 percent for 2024-25, but revised to 2.93 percent.
With an expected economic growth of 7.3 percent in 2024-25, the fiscal deficit for 2025-26 is estimated at 2.76 percent, remaining below the 3 percent threshold set by the Fiscal Responsibility and Budget Management Act.
The revenue deficit for 2023-24 was 0.42 percent of GSDP, with a budget estimate of 0.47 percent for 2024-25, but revised to 0.59 percent.
The statement underscores the necessity to reduce the revenue deficit by boosting revenue receipts in 2025-26.
Furthermore, there is a growing concern regarding escalating administrative costs, including salaries, pensions, and interest payments. The government must prioritize expenditure, manage public debt efficiently, and effectively control limited resources to keep revenue expenditure in check.
According to the budget estimate for 2025-26, the state's salary expenditure will amount to Rs 1,72,000 crore, compared to Rs 1,46,000 crore in 2024-25.
The state will also need to allocate 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)
