As the Mahayuti alliance decisively routed the Maha Vikas Aghadi (MVA) in Maharashtra's Assembly elections, attention has shifted to the promises that propelled its victory. The coalition of the Bharatiya Janata Party (BJP), the Shiv Sena, and the Nationalist Congress Party (NCP) has pledged significant financial support to women, farmers, youth, and senior citizens. These commitments, while politically potent, pose complex challenges for the state's fiscal management.
Maharashtra's fiscal health offers some leeway. The state's fiscal deficit remains well within the 3 per cent of gross state domestic product (GSDP) limit, while its revenue deficit is below 1 per cent.
This fiscal discipline ensures that additional spending on electoral promises may not immediately trigger alarm. However, this may raise the revenue expenditure component—which is already 80–90 per cent of total spending of the past five years—ever further, leaving little room for capital expenditure for long-term growth.
Esta historia es de la edición November 25, 2024 de Business Standard.
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