Maharashtra Off-Budget Guarantees Rise To 1.81 Lakh Crore Drawing CAG Criticism
The Maharashtra government’s cumulative outstanding guarantees for off-budget loans have risen to Rs 1.81 lakh crore, drawing sharp criticism from the Comptroller and Auditor General (CAG). According to a finance department statement tabled in the state legislature in Mumbai on Friday, these borrowings have significantly understated the state's actual debt burden and reduced fiscal transparency.
During the FY2025-26 financial year, the state government extended fresh guarantees for loans worth Rs 51,700 crore. This pushed the cumulative outstanding guarantees as of March 31, 2026, up from Rs 1.44 lakh crore a year earlier. The outstanding guarantees are now equivalent to 16.4% of the state’s estimated debt stock of Rs 11.03 lakh crore.
The CAG report, which was also tabled in the legislature, criticized the government’s growing dependence on off-budget financing. The auditor warned that such borrowings are not fully reflected in budget documents, which understates the fiscal deficit. The report added that the state’s fiscal sustainability is under pressure due to large expenditures on the Mukhyamantri Majhi Ladki Bahin Yojana, mounting liabilities, and unspent funds parked outside the consolidated fund.
The finance department's statement detailed major off-budget borrowings by state agencies. The Maharashtra State Road Development Corporation (MSRDC) raised the highest amount of Rs 22,250 crore on bank guarantees for land acquisition for the Virar-Alibag multi-nodal corridor.
In Mumbai, the Mumbai Metropolitan Region Development Corporation (MMRDA) raised Rs 12,000 crore from the Power Finance Corporation and Union Bank of India for local infrastructure projects. In Nagpur, the Nagpur Metropolitan Region Development Corporation raised Rs 7,800 crore from HUDCO for roads, traffic islands, and land acquisition.
Other major borrowers included the state-owned power distribution company Mahavitaran, which raised Rs 7,480 crore to repay outstanding dues to power generation and transmission companies, and the Maharashtra Urban Infrastructure Fund, which raised Rs 2,000 crore.
Additionally, the state government stood guarantee for loans totaling Rs 139.88 crore from the Maharashtra State Cooperative Bank Limited for two cooperative sugar factories. These loans went to the Babanrao Dhakane Kedareshwar sugar factory (Rs 39.88 crore), controlled by NCP leader Prataprao Dhakne, and the Shetkari Cooperative Sugar Factory (Rs 100 crore), controlled by BJP MLA Abhimanyu Pawar.
A finance department official stated that borrowing through agencies is used to keep the official debt-to-GDP ratio below guidelines. However, adding the Rs 1.81 lakh crore to the debt stock pushes the debt-to-GSDP ratio beyond the 25% ceiling prescribed under the Fiscal Responsibility and Budget Management (FRBM) Act, ultimately impacting the state’s credit rating.
