As the Mahayuti government prepares its first budget post-assembly elections, it faces a difficult balancing act—managing rising debt while sustaining welfare programs, especially with local body polls approaching.
The government aims to continue social schemes but may tighten beneficiary criteria, similar to its approach with the Mukhya Mantri Majhi Ladki Bahin Yojana. Despite pre-election promises, raising the scheme’s monthly stipend from ₹1,500 to ₹2,100 seems unlikely. Meanwhile, Chief Minister Devendra Fadnavis has already announced an increased outlay for the Namo Shetkari Samman Nidhi, boosting annual aid to farmers from ₹6,000 to ₹9,000.
The state’s debt was projected at ₹7.8 lakh crore for 2024-25. Pre-election welfare initiatives totaled ₹96,000 crore, significantly contributing to the government’s victory. Additionally, post-election supplementary budget demands reached a record ₹1.37 lakh crore. By October 2024, the fiscal deficit was pegged at ₹2 lakh crore, prompting concerns about financial sustainability.
Officials plan to cap the fiscal deficit at 3% of the Gross State Domestic Product (GSDP) in line with budgetary norms. While Fadnavis has ruled out cutting welfare and infrastructure spending, raising revenue remains a challenge amid a global economic slowdown. The government is exploring financing options such as borrowing, monetization, and build-operate-transfer models for infrastructure projects.
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