Mumbai, July 10 (SocialNews.XYZ) The Comptroller and Auditor General (CAG) of India has raised serious concerns over Maharashtra's fiscal transparency, revealing that the state's off-budget borrowings surged to Rs 28,325 crore by the end of the 2024–25 fiscal year.
According to the latest State Finances Audit Report, these multi-crore liabilities were excluded from the state's official budget documents, thereby understating its total debt burden and bypassing legislative oversight. The audit findings could dent the political image of the ruling alliance.
The bulk of the fiscal period covered was under the chief ministership of Eknath Shinde, with the Bharatiya Janata Party's (BJP) Devendra Fadnavis serving as the Finance Minister. Following the assembly elections last November, Fadnavis took over as Chief Minister, while Shinde stepped into the role of Deputy Chief Minister.
According to the CAG, the Maharashtra State Road Development Corporation (MSRDC) acted as the primary vehicle for these borrowings. Backed by state government guarantees, the MSRDC raised massive loans from the Housing and Urban Development Corporation Limited (HUDCO) over the last three fiscal years: 2022–23: Rs 2,500 crore, 2023–24: Rs 7,700 crore and 2024–25: Rs 18,440 crore.
The audit noted that the Finance Department's own sanction conditions mandate that the state government make annual budgetary provisions to repay the principal and interest on these loans. This requirement effectively turns these off-budget instruments into a direct liability on the state exchequer.
Under the Maharashtra Fiscal Responsibility and Budgetary Management (MFRBM) Act, 2005, a state's total liabilities must encompass all borrowings under its Consolidated Fund and Public Account.
The CAG pointed out that by excluding these non-budgetary receipts, which are ultimately serviced through the state budget, the government has hidden the true scale of its debt.
While official financial accounts pegged Maharashtra's outstanding public debt and other liabilities at Rs 8,59,097 crore, including hidden off-budget borrowings raises the state's effective liabilities to Rs 8,87,422 crore.
With Maharashtra's Gross State Domestic Product (GSDP) estimated at Rs 45,31,518 crore, this adjusted debt mountain constitutes 19.58 per cent of the GSDP.
The report warned that creating such undisclosed liabilities raises serious questions about inter-generational equity and transparency, keeping the state's true debt position away from democratic scrutiny.
Beyond hidden debts, the CAG flagged deeper systemic issues plaguing Maharashtra's financial health. While the state managed to keep its overall fiscal deficit within the MFRBM ceiling at 2.74 per cent of GSDP, its revenue deficit widened sharply to Rs 29,994.76 crore. This indicates that Maharashtra is increasingly relying on borrowed capital to fund day-to-day administrative expenses rather than creating long-term productive assets.
The state's spending remains severely skewed. A staggering 63.45 per cent of its total revenue receipts is eaten up by committed expenditures, which include government salaries, pensions, interest payments, and subsidies.
The audit also called out the practice of parking large, unspent fund balances in Virtual Personal Deposit Accounts and Drawing and Disbursing Officers' (DDO) bank accounts, noting that this manoeuvre artificially inflates annual expenditure and deficit figures.
Source: IANS
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