The Maharashtra government has announced an austerity drive to address the rising fiscal deficit and public debt, directing a 30% cut in expenditure across all departments. The government also mandated a 20% reduction in fuel expenses for government vehicles, according to a notification released late Thursday night.
As the revised budget preparation is underway, departments are instructed to spend only 70% of the original budget provisions, ensuring the availability of funds for necessary expenditures. Proposals for fund distribution in areas such as prize distribution, foreign travel, publications, computer expenses, advertising, constructions, contractual services, subsidiary grants, and motor vehicles must be submitted to the Finance Department by February 18.
The notification clarifies that unspent funds cannot remain in the bank accounts of regional offices, boards, and corporations. The government has allowed 95% expenditure for salary payments and up to 80-90% for water, electricity, telephone, contractual services, office expenses, and professional services. However, various schemes, including the District Annual Plan, MLA Local Development Fund, and Union government-sponsored initiatives, are excluded from the austerity plan. Full fund distribution is permitted for scholarships, stipends, loans, interest, inter-account transfers, and pension-related expenses.
Government sources revealed that by February 12, Rs 6.18 trillion had been disbursed out of the Rs 8.23 trillion budget provisions, with actual expenditure at Rs 3.86 trillion, or 46.89% of the total budget. The Finance Department aims to limit the fiscal deficit, with projected expenditure excluding debt repayment at Rs 6.12 trillion for 2024-25, a 2% increase over the revised estimates for 2023-24. The state will also repay Rs 571.98 billion in debt. Receipts excluding borrowings are projected at Rs 5.01 trillion, a 3% increase compared to the revised estimate of 2023-24.
The fiscal deficit is expected to reduce only with expenditure cuts. The austerity measures are part of the government’s efforts to mobilize funds for welfare and development schemes worth Rs 1 trillion, including the debated Ladki Bahin Yojana and free electricity for farmers ahead of the assembly elections. The fiscal deficit has nearly reached Rs 2.3 trillion, with public debt around Rs 8 trillion.
The government has excluded over 5 million women beneficiaries from Ladki Bahin Yojana due to ineligibility, earmarking Rs 460 billion for the scheme. Other allocations include Rs 147.61 billion for free electricity to farmers, Rs 18 billion for free education for girls, Rs 55 billion for MukhyaMantri Youth Training, Rs 13 billion for Annapurna Yojana, Rs 10 billion for Lek Ladki Yojana, Rs 4.8 billion for the Senior Citizens scheme, and Rs 3.41 billion for the godown scheme.
The austerity drive comes ahead of the budget presentation for 2025-26 by Deputy Chief Minister and Finance Minister Ajit Pawar on March 3.
