Mumbai The state would need to work hard to reach the $1 trillion economic objective, even though Maharashtra’s gross state domestic product (GSDP) is predicted to be Rs 49,39,355 crore in 2025–2026 from Rs 45,31,518 crore in the revised projection for 2024–2025.

In order to stimulate the economy, the state government would need to increase efforts to follow the Medium Term Fiscal Policy statement, which was delivered by Deputy Chief Minister and Finance Minister Ajit Pawar together with the yearly Budget for 2025–2026.

According to the policy statement, the state’s financial system is under more strain as a result of growing urbanization, which raises demand for housing, transportation, power, water supply, and other infrastructural amenities.

As both tax and non-tax revenue increase, the state administration intends to overcome this obstacle.

State GST, State VAT, stamp and registration duty, State excise duty, energy tax, car tax, land revenue, professional tax, goods and passenger tax, and other taxes and duties make up the state’s tax income.

The budget projection for own tax income for 2025–2026 has been set at Rs 3,87,673.72 crore, a 5.50 percent increase over the revised estimate of Rs 3,67,467.23 crore for 2024–2025.

Interest, receipts, penalties, fees, service charges, dividends, earnings, royalties, and deposits are all considered forms of non-tax income. Non-tax income is projected to increase from Rs 30,143.33 crore in 2024–2025 to Rs 33,052.24 crore in 2025–2026.

Additionally, in 2025–2026, the state is counting on devolution from the Center, which is anticipated to be Rs 89,726.30 crore as opposed to Rs 81163.34 crore.

However, compared to Rs 57,692.35 crore in 2025–2026, the state experiences a decline in assistance allocations to Rs 50,511.36 crore. This increases the pressure to concentrate more on mobilizing its resources to compensate for the shortfall.

The policy statement predicts a drop in capital spending to Rs 93,165.52 crore in 2025–2025 from the revised estimate of Rs 1,09,031.48 crore for 2024–2025, notwithstanding the government’s emphasis on providing a much-needed push for development projects.

In pursuit of the state’s ambitious $1 trillion aim, the policy statement emphasizes the timely completion of several infrastructure projects via a variety of public undertakings, special purpose organizations, and municipal corporations.

Furthermore, from 98.09 percent in the budget estimate to 92.44 percent in the revised estimate, the revenue collections to revenue expenditure ratio for 2024–2025 has somewhat declined.

The policy document states that the fiscal deficit in 2023–2024 was 2.24 percent of GDP, but the budget projection for 2024–2025 indicated that the deficit would be 2.59 percent of GDP. But according to the updated assessment, it increased to 2.93 percent.

According to the budget Responsibility and Budget Management Act, the budget deficit for 2025–2026 has been anticipated to be 2.76 percent, which is less than 3 percent of GSDP, given the economic growth (7.3 percent in 2024–2025).

Although the budget projection for 2024–2025 put the revenue shortfall at 0.47 percent of GSDP, the revised estimate increased it to 0.59 percent of GSDP.

In 2023–2024, the revenue deficit was 0.42 percent of GSDP.

The need of raising tax collections in 2025–2026 in order to decrease the revenue gap has been emphasized in the policy statement.

The policy statement has expressed concern about the escalating administrative costs, such as salaries, pensions, and interest payments. To control revenue expenditure, the state government will need to prioritize spending, manage public debt effectively, and manage limited resources effectively.

The state would spend Rs 1,72,000 crore on wages in 2025–2026 compared to Rs 1,46,000 crore in 2024–2025, according to the budget projection.

In 2025–2026, the state would have to pay Rs 64,659 crore in interest and Rs 75,137 crore for pension payments.