Maharashtra departments told to specify potential rise in expenditure while sending proposals

Mumbai: Maharashtra Chief Secretary Sujata Saunik has issued a directive to all departments mandating that any new proposals presented to the state cabinet must clearly outline the potential increase in expenditure beyond their allocated budget.

The directive, issued on Friday, comes amid signs of the state's financial constraints.

It has called for transparency in identifying the potential increases in expenditure for any new proposal, thus holding departments accountable for their financial commitments.

The directive stresses that no proposals should be submitted to the cabinet without specifying how much the department's expenditure may exceed its original allocation.

To rein in the unnecessary spending, departments have also been instructed to limit unproductive expenditure, consolidate redundant government schemes, and curb free-of-cost services wherever possible, an official said.

The directive encourages reducing non-productive spending, merging redundant schemes and focusing on increasing productive capital expenditure.

This is part of the state's broader strategy to rein in its fiscal deficits and ensure that essential schemes are not undermined by excessive borrowing and unsustainable spending practices, the official said.

Notably, state Deputy Chief Minister and Finance Minister Ajit Pawar last week advised farmers to pay their crop loan instalments on time rather than awaiting a loan waiver announcement, citing the state's current financial constraints.

Later, Deputy CM Eknath Shinde also called for maintaining balance in the state finances, adding that funds should be available for welfare schemes, development, and employees' salaries.

He had also said the monthly aid for women under Ladki Bahin scheme, which is believed to have played a key role in the BJP-led Mahayuti's win the the 2024 state polls, will be raised from the current Rs 1,500 to Rs 2,100 after the state's financial condition is strengthened.

While the government has allocated Rs 36,000 crore for the Ladki Bahin scheme in the budget, it made no mention of the hike in the allowance from Rs 1,500 to Rs 2,100 in the beneficiaries, as promised by the ruling Mahayuti before the assembly elections last year.

In the more than Rs 7,00,020 crore state budget for the fiscal 2025-26 presented by Pawar earlier this month, the government projected a revenue deficit of Rs 45,891 crore and a fiscal deficit of more than Rs 1,36,000 crore.

The revenue receipts are expected to be more than Rs 5,60,000 crore.

Pawar had said the government has been successful in keeping the fiscal deficit below 3 per cent of the Gross State Domestic Product (GDSP), and the state's revenue deficit has been consistently less than 1 per cent of the gross state income.