Maha Polls: Guarantees by MahaYuti & MVA to increase fiscal burden on state exchequer
Sanjay Jog
Amid bitter fight for the 288-member Maharashtra Assembly elections slated for November 20, the MahaYuti and Maha Vikas Aghadi are engaged in bitter competition over the announcement of slew of guarantees or promises to lure the voters. The MahaYuti led by the Chief Minister Eknath Shinde comprising BJP, Shiv Sena and NCP has announced 10 guarantees on Tuesday while the Maha Vikas Aghadi consisting of Congress, Shiv Sena and NCP released five guarantees titled ‘’Panchsutri’’ on Wednesday.??The MahaYuti in its ‘’please all ‘’10 guarantees has made an attempt to cover various sections while the Maha Vikas Aghadi has focused on reaching out to farmers, women, youth and young women through the Panchsutri.
However, one thing is common, these slew of populist slogans 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 Maha Vikas Aghadi, senior bureaucrats expect that the new government may have to bear additional burden ranging between Rs 50,000 and Rs 1,00,000 crore to fulfill those promises.
These promises, a part of ‘’revadi’’ culture, need to be seen in the context of the state government’s present financial position. The 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 has been 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% of GSDP. This is higher than the budget estimate (2.5%). Fiscal deficit is projected to be lowered to 2.3% of GSDP by 2026-27.
In 2024-25, Maharashtra is estimated to spend Rs 2,75,615 crore on committed expenditure, which is 55% of its estimated revenue receipts. This comprises spending on salaries (32% of revenue receipts), pension (12%), and interest payments (11%). In 2023-24, expenditure towards pensions is estimated to be 16% 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 a rise in monthly financial aid to Rs 2,100 fro Rs 1,500 under the Ladki Bahin Yojana while the Maha Vikas Aghadi has announced a monthly assistance of Rs 3,000 under the Mahalakshmi Yojana to women and free transportation in government buses across Maharashtra. MahaYuti and MVA have both promised farm loan waiver though MVA is specific that the loan up to Rs 3 lakh will be waived 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% 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 Maha Vikas Aghadi 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.?