The government presented the final budget for fiscal year 25 of Rs 6.12 trillion on June 28. | File Photo: PTI
The increase in social spending announced by the Eknath Shinde-led Maharashtra government ahead of the elections will push the fiscal deficit beyond the target and may lead to a compression in capital expenditure, according to a report released on Monday.
The fiscal deficit for FY25 is expected to be 3 per cent, against the budget target of 2.5 per cent, India Ratings and Research said in a report, adding that the state will resort to higher borrowing to bridge the gap.
The government presented the final budget for FY25 of Rs6.12 trillion on June 28, and also submitted supplementary demands of Rs94.889 billion on July 10, mainly for social welfare schemes, he said.
The supplementary demands include Rs 25,000 crore for Mukhyamantri Majhi Ladki Bahin Yojana, Rs 6,056 crore for skill development, Rs 4,317 crore for social justice, Rs 4,185 crore on public health, he said.
The revenue deficit will be 1.3 percent, compared with the budget target of 0.5 percent, he added.
“The fiscal deficit is expected to be around 3 percent in FY25 with an assumed nominal GDP growth of 9.5 percent,” it said.
“There could also be a compression in capital expenditure in FY25 compared to FY25BE (budget estimates) to accommodate revenue expenditure while containing the fiscal deficit,” the rating agency said.
The state would be availing fresh market borrowings worth Rs 75,917 crore, which would fund 68.8 per cent of its budgeted fiscal deficit in FY25, the agency said.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: August 12, 2024 | 10:49 PM IS
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