Maharashtra's Debt Set To Breach ₹11 Lakh Crore As Fiscal Pressures Mount

Mumbai: Despite an upward trend in economic growth and per capita income, Maharashtra’s rising debt burden continues to raise concern. According to the budget estimates presented on Friday, the state’s total debt is projected to cross ₹11,02,654 crore in 2026–27. At the end of the 2025–26 financial year, the state’s loan burden is estimated at ₹9,73,989 crore, accounting for 19.09% of the Gross State Domestic Product (GSDP).

The projected debt of over ₹11 lakh crore for the next financial year will rise to 20.38% of the GSDP. The annual borrowing requirement has also increased. During 2025–26, it was initially estimated that the government would raise ₹1.35 lakh crore through loans, but the revised estimate now stands at ₹1.51 lakh crore by March 31, according to budget documents. For the next financial year, the budget projects borrowings of ₹1.50 lakh crore.

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Asked about the rising debt after presenting the budget, Chief Minister Devendra Fadnavis said that although the overall debt burden would cross ₹11 lakh crore, the Centre would share ₹89,000 crore. He added that the state raises loans according to its financial capacity and that the annual borrowing limit is determined by the Reserve Bank of India. “We never raise debt beyond the prescribed limit,” he said.

Experts say governments are often forced to borrow more when revenue expenditure rises and remains difficult to contain. Maharashtra’s revenue deficit in the current financial year is estimated at ₹37,054 crore and is projected to increase to around ₹40,000 crore in 2026–27. A revenue deficit indicates that the government is unable to meet routine operational expenses through its own income and must rely on borrowings. While presenting the budget, the Chief Minister said the government had managed to keep the revenue deficit below 1% of GSDP and the fiscal deficit below 3% of GSDP.

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According to the revised estimates for 2025–26, revenue receipts are pegged at ₹6,01,789 crore, higher than the earlier budget estimate of ₹5,60,964 crore. Revenue expenditure for the year is estimated at ₹7,55,920 crore, compared with the budget estimate of ₹7,00,020 crore. The state is expected to spend ₹70,055 crore on interest payments on its debt. Budget documents also reveal that Maharashtra currently spends about ₹1.47 lakh crore on salaries of government employees.

In the next fiscal year, the salary bill is expected to rise to ₹1.75 lakh crore. During 2025–26, the government is spending ₹67,279 crore on pensions, which is projected to increase to ₹92,379 crore in the next fiscal year. Pension expenditure alone will account for 11.19% of the state’s revenue income. Together, salaries and pensions will consume 43.55% of the state’s revenue income in the coming financial year.

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