Maharashtra CM Fadnavis Calls for Financial Reforms to Boost State Revenue and Resource Allocation

Maharashtra Chief Minister Devendra Fadnavis has convened the Maharashtra Sustainable Public Finance Committee, led by former Finance Secretary Vijay Kelkar, directing it to prepare a six-month fiscal reform roadmap. The Chief Minister highlighted a financial mismatch where state agency funds earn around four per cent interest while the state borrows at eight to nine per cent. Revenue receipts for 2026-27 are estimated at Rs 6,16,099 crore, with 73 per cent sourced from the state's own resources, as Maharashtra targets becoming a trillion dollar economy by 2029-30.

On Monday, Maharashtra Chief Minister Devendra Fadnavis urged a departure from conventional revenue-gathering approaches, calling on officials to adopt fresh strategies for resource mobilisation and to overhaul the state's fiscal and administrative frameworks. At a inaugural gathering of the newly formed Maharashtra Sustainable Public Finance Committee, chaired by former Finance Secretary Vijay Kelkar, the Chief Minister instructed the body to undertake a thorough examination of revenue mobilisation, financial accounting, and the optimal deployment of resources, with an actionable plan to be delivered within six months. Chief Minister Fadnavis drew attention to a financial imbalance in state agency holdings, noting that approximately Rs 6,000 crore to Rs 7,000 crore held by various government bodies earns returns of around four per cent, while the state government borrows from open markets at rates between eight and nine per cent, and called for this gap to be addressed so that available funds are put to better use. CM Fadnavis called for the creation of new financial tools that would safeguard the operational independence and fiscal stability of government bodies while ensuring their capital is deployed as effectively as possible. The Chief Minister noted that holdups in project delivery weaken the broader economic returns generated by government spending. An exhaustive audit of government expenditure will be undertaken to improve how public funds are allocated. The state government announced plans to adopt the advisory panel's proposals for restructuring its financial and administrative frameworks. The establishment of an advisory panel on fiscal reforms aligns with the state government's stated ambitions to grow its economy to one trillion dollars by 2029-30 and five trillion dollars by 2047, alongside efforts to boost revenue generated through the state's own taxation and non-taxation channels. Projected revenue receipts for the 2026-27 fiscal year stand at Rs 6,16,099 crore, reflecting a two per cent rise compared with the revised 2025-26 estimate. Of the total, the state will mobilise Rs 4,51,626 crore (73 per cent) through its own revenue streams, while the remaining Rs 1,64,473 crore (27 per cent) will flow from central government allocations. The Centre's transfers to states will comprise two components: a 16 per cent share of central tax revenues and grants equivalent to 11 per cent of revenue receipts. The state's aggregate own tax receipts for 2026-27 are projected at Rs 4,15,498 crore, reflecting a one per cent rise against the revised 2025-26 figures. Projected own tax receipts for 2026-27 stand at 7.7 per cent of GSDP, falling short of the 8 per cent recorded in the revised estimates for 2025-26. According to recorded data for 2024-25, the state's own tax collections stood at 7.5 per cent of GSDP.

Maharashtra CM Fadnavis Calls for Financial Reforms to Boost State Revenue and Resource Allocation

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Maharashtra CM Fadnavis Calls for Financial Reforms to Boost State Revenue and Resource Allocation

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