MUMBAI — In a damning institutional critique of the state’s financial health, the Comptroller and Auditor General (CAG) has revealed that Maharashtra’s actual fiscal deficit for the financial year 2024–25 breached the statutory 3% ceiling mandated under the Fiscal Responsibility and Budget Management (FRBM) Act.
While the state government formally reported a fiscal deficit of ₹1,24,208.74 crore (2.74% of GSDP), the national auditor’s post-audit assessment exposes that the actual fiscal deficit stood significantly higher at ₹1,44,926.46 crore (3.20% of GSDP), driven by hidden liabilities and accounting irregularities.
The Deficit Discrepancy: Reported vs. Audited
The CAG report indicates a steady weakening of Maharashtra’s fiscal position over a five-year horizon, noting that the gross fiscal deficit nearly doubled from ₹71,558 crore in 2020–21 to the current levels.
| Fiscal Indicator | Government Reported | CAG Actual Audited | GSDP Impact (Audited) |
| Fiscal Deficit | ₹1,24,208.74 cr | ₹1,44,926.46 cr | 3.20% (Breached 3% Limit) |
| Revenue Deficit | ₹29,994.76 cr | ₹36,342.29 cr | 0.80% |
| Total Public Debt | ₹8.59 lakh cr | ₹8.87 lakh cr | 19.58% |
Unmasking Off-Budget Borrowings via MSRDC
The single largest factor behind the understated deficit was the heavy reliance on extra-budgetary financing to fund major infrastructure pushes:
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The MSRDC Route: The state government excluded ₹18,440 crore of off-budget borrowings raised by the Maharashtra State Road Development Corporation (MSRDC) from HUDCO during 2024–25.
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The Hidden Liability: Because these borrowings carry an explicit state government guarantee—with principal and interest servicing tied directly to budgetary allocations—the CAG ruled they must be counted as direct state debt.
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Accumulated Debt: The outstanding off-budget borrowing via MSRDC has ballooned from ₹2,500 crore in 2022–23 to ₹28,325 crore as of March 31, 2025.
Accounting Irregularities and Capital Inflation
Beyond off-budget loans, the apex auditor flagged multiple fiscal maneuvers that artificially lowered the deficits and inflated state asset creation:
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Misclassification Matrix: The audit uncovered a ₹4,069.91 crore misclassification between revenue and capital expenditure, alongside ₹1,515.23 crore in non-transferred cesses/surcharges and ₹762.49 crore in unadjusted reserve fund interest.
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Artificial Hikes in Capital Spending: The state accounted for ₹1,456.48 crore in interest payments and ₹250 crore in loan repayments for MSRDC’s debt as capital expenditure on roads and bridges. The CAG firmly rejected this classification, noting that these outlays created zero new physical assets, thereby artificially inflating the state’s reported infrastructure spending.
The Auditor’s Conclusion: The CAG warned that relying heavily on extra-budgetary mechanisms effectively bypasses legislative oversight, masks the true depth of the state’s debt distress, and fundamentally violates the transparency benchmarks established under the Maharashtra FRBM Act.
