Maharashtra Faces Risk Of Falling Into Debt Trap

Maharashtra’s debt has now crossed the Rs 10 lakh crore mark, revealed former Opposition leader in Maharashtra’s Legislative Council Ambadas Danve. The state is raising Rs 57,509.7 crore through supplementary demands. Danve pointed out that the state spends one-third of its revenue in servicing its debt. The state already has a per capita debt of Rs 72,761 and has already earmarked Rs 1.54 lakh crore towards debt servicing including Rs 89,798 crore for principal amount repayment and Rs 64,659 crore towards interest servicing, in the 2025-26 budget. Danve estimated Maharashtra’s fiscal deficit to cross Rs 2 lakh crore by the end of this financial year; it currently stands at Rs 1.36 lakh crore. The state has been issuing tenders though it doesn’t have the funds to pay contractors and now hopes to rely on revenue of Rs 24,000 crore expected from excise duty on liquor to sail through, he said. The state has already diverted Rs 1081.7 lakh crore from various departments to fund its Ladki Bahin Yojana. According to financial analyst Rupesh Keer of Samarthan Advocacy, this is the first time that the state has taken debts to service its ballooning debt interest which reflects poor fiscal discipline. Already, Maharashtra has slipped down to the fifth position in terms of development in the country. The state is already under fire from the Comptroller and Auditors Report (CAG) for various off-budgetary borrowings that bypass legislative scrutiny and threaten to lead Maharashtra into a cycle of debt trap.