Guarantees by Mahayuti, MVA to increase fiscal burden on Maha exchequer

Mumbai: Amid a bitter fight for the 288-member Maharashtra Assembly elections slated for November 20, the Mahayuti and Maha Vikas Aghadi (MVA) are engaged in an intense competition over the announcement of a slew of guarantees or promises to lure voters.

The Mahayuti led by Chief Minister Eknath Shinde comprising BJP, Shiv Sena and NCP had announced 10 guarantees on Tuesday while the MVA consisting of the Congress, Shiv Sena (UBT) and NCP(SP) released five guarantees titled ‘Panchsutri’ on Wednesday.

The Mahayuti in its “please all” guarantees, has made an attempt to cover various sections while the MVA has focussed on reaching out to farmers, women, youth and young women through the ‘Panchsutri’.

However, one thing is common, these slew of populist schemes will put additional financial burden on the state exchequer posing a major challenge to the new government to cope up amid tight finances.

With the announcement of guarantees by both Mahayuti and MVA, senior bureaucrats expect that the new government may have to bear an additional burden ranging between Rs 50,000 crore and Rs 1,00,000 crore to fulfil those promises.

These promises, a part of the “revadi” culture, need to be seen in the context of the Maharashtra government’s present financial position.

The Maharashtra government’s fiscal deficit is now over Rs 2 lakh crore especially after the Mahayuti government’s implementation of a slew of welfare and development schemes worth Rs 1 lakh crore announced in the annual budget.

The government’s revenue deficit is projected to be Rs 20,051 crore while its public debt will be Rs 7.82 lakh crore.

As per the revised estimates, in 2023-24, the fiscal deficit of the state is expected to be 2.8 per cent of the GSDP.

This is higher than the budget estimate (2.5 per cent). Fiscal deficit is projected to be lowered to 2.3 per cent of the GSDP by 2026-27.

In 2024-25, Maharashtra is estimated to spend Rs 2,75,615 crore on committed expenditure, which is 55 per cent of its estimated revenue receipts.

This comprises spending on salaries (32 per cent of revenue receipts), pension (12 per cent), and interest payments (11 per cent).

In 2023-24, expenditure towards pensions is estimated to be 16 per cent lower than the budget estimate.

The expenses on these freebies will leave very limited funds for carrying out capital expenditure which is needed to generate assets, jobs, additional revenue and ultimately to boost the economic growth.

The Mahayuti has promised an increase in monthly financial aid to Rs 2,100 from Rs 1,500 under the Ladki Bahin Yojana while the MVA has announced a monthly assistance of Rs 3,000 under the Mahalakshmi Yojana to women and free transportation in government buses across Maharashtra.

The Mahayuti and MVA have both promised farm loan waiver though the MVA is specific that loans up to Rs 3 lakh will be waived off with additional incentive of Rs 50,000 for those repaying the loans regularly.

The Mahayuti has promised an expanded Shetkari Samman Yojana by increasing the annual financial assistance to Rs 15,000 from Rs 12,000 for farmers and adding a 20 per cent subsidy on the Minimum Support Price (MSP).

The Mahayuti has assured creation of 25 lakh jobs and financial assistance of Rs 10,000 to 10 lakh students.

On its part, the MVA has promised to pay Rs 4,000 per month to unemployed youth.

Further, it has promised health insurance up to Rs 25 lakh and free medicines.

It remains to be seen how the new government will be able to cater for these freebies.