CAG flags Maharashtra fiscal stress as undischarged liabilities exceed Rs 27,184 crore
The Comptroller and Auditor General (CAG) has flagged widening fiscal stress, a rising revenue deficit, and weak budget planning in Maharashtra for the 2024-25 fiscal year. Despite robust economic growth in the state, the audit warned that mounting liabilities and rising revenue expenditure are threatening the government's ability to invest in public infrastructure and essential services.
According to the CAG's State Finances Report, Maharashtra's undischarged liabilities have exceeded Rs 27,184 crore, a factor that could further worsen both the revenue and fiscal deficits. The audit cautioned that the state may have to rely more heavily on borrowings to finance development projects rather than creating productive assets.
The report revealed that committed expenditure—comprising government salaries, pensions, and interest payments—stood at Rs 2.49 lakh crore. This accounted for 51.81% of the state's revenue receipts during 2024-25, constraining Maharashtra's fiscal flexibility.
Additionally, total subsidies in the state rose sharply by 16.72% to Rs 56,089.18 crore. This surge was primarily driven by higher electricity tariff subsidies for agricultural pump consumers and financial support for cotton, soybean, and oilseed cultivation.
The CAG also pointed out persistent shortcomings in budget execution by various state departments. The audit found repeated instances of excessive supplementary grants, large unused savings, delayed surrender of unspent allocations, and a high concentration of expenditure in March 2025, the final month of the financial year.
Furthermore, the report highlighted pressures on local body finances. The Centre did not release any of the recommended Rs 1,391 crore grant for Maharashtra's six eligible million-plus urban agglomerations during 2024-25, with the only released funds being withheld grants from the previous year.
To restore fiscal health, the CAG recommended that the Maharashtra government strengthen revenue mobilisation, reduce the revenue deficit, contain committed expenditure, and ensure more realistic budget estimates to avoid year-end spending spikes.
