Mahayuti’s First Budget: Fiscal Discipline Takes Precedence Over Poll Promises

The Mahayuti government’s first Budget for Maharashtra prioritizes financial prudence over populist commitments, as Finance Minister Ajit Pawar refrained from announcing major pre-election promises such as raising Ladki Bahin Yojana assistance to ₹2,100 per month or granting a farm loan waiver.

With Maharashtra’s balance sheet under strain, the Budget reflects a cautious approach. The state’s revenue deficit has more than doubled, soaring from ₹20,050.69 crore in 2024-25 to ₹45,890.86 crore, contributing to a fiscal deficit of ₹1,36,234.62 crore. Analysts attribute this to pre-election sops offered by the previous Mahayuti administration, which significantly increased state expenditure.

A Comptroller and Auditor General (CAG) report for the fiscal year ending March 2023 had already raised concerns, stating that 59.54% of Maharashtra’s debt is due for repayment by 2030. This impending debt obligation has placed additional pressure on the state’s finances.

No Major Sops, Only Marginal Capital Expenditure Growth

Despite an ₹87,341.15 crore rise in revenue expenditure, capital expenditure saw only a marginal increase of ₹385 crore compared to the last financial year. This left the government with little flexibility to introduce cash benefits for women or debt relief for farmers.

Implementing the Ladki Bahin Yojana hike alone would have escalated costs from ₹36,000 crore to over ₹50,000 crore, while a farm loan waiver would have required ₹30,000-35,000 crore. Additionally, the Mahayuti coalition had pledged to raise the state grant for farmers from ₹6,000 to ₹9,000 per year, further straining financial resources.

A senior government source defended the cautious approach:
“Had we allocated funds for these schemes now, development expenditure and job creation would have suffered. The government remains committed to fulfilling its promises but will implement them at an appropriate time once financial stability is restored.”

Strategic Timing: No Elections, No Immediate Populism

With no major elections on the horizon, the Mahayuti government sees this as an opportune moment to enforce fiscal discipline, even if it risks disappointing certain voter groups in the short term.

In his Budget speech, Ajit Pawar underscored the need to drive economic growth through private investment, public investment, consumer spending, and exports. He emphasized that government-led infrastructure projects and industrial incentives are helping attract both domestic and foreign direct investment (FDI) into the state.

The tone of the Budget signals a shift away from poll-driven spending. Pawar himself had hinted at this shift last month:
“Last year was an election year, and therefore, some concessions were given. For the next five years, discipline needs to be followed.”

Key Takeaway: Pragmatism Over Political Gains

By holding off on big-ticket populist measures, the Mahayuti government has sent a clear message: fiscal discipline and economic stability take priority over short-term electoral gains. The Budget reflects a long-term strategy, focusing on investment, infrastructure, and financial responsibility—even if it means delaying some promises until the state’s finances improve.