Maharashtra Budget 2026: State debt likely to cross Rs 11 lakh crore in 2026-27 amid rising infrastructure and welfare spending

Maharashtrarsquos total debt stock is projected to cross Rs 11 lakh crore in the financial year 202627 reflecting a steady rise in government borrowing to fund large infrastructure projects and welfare schemes according to the state budget documents released on FridayThe figures show that Maharashtrarsquos total debt is estimated at Rs 1102654 crore in 202627 marking a significant increase from Rs 973989 crore in 202526 and Rs 840247 crore in 2024ndash25Government officials said the rising borrowing requirement is largely driven by increased spending on major infrastructure projects and social welfare programmes aimed at boosting economic growth and improving public servicesState debt more than doubles in eight yearsBudget data indicates that Maharashtrarsquos debt burden has more than doubled over the past decadeIn 2018ndash19 the statersquos debt stood at Rs 407152 crore which represented 161 per cent of the Gross State Domestic Product GSDPOver the following years the debt continued to rise steadily It increased to Rs 451117 crore in 2019ndash20 Rs 519086 crore in 2020ndash21 and Rs 576868 crore in 2021ndash22The upward trend continued with the debt reaching Rs 629235 crore in 2022ndash23 Rs 718507 crore in 2023ndash24 and Rs 840247 crore in 2024ndash25 The latest estimates show the debt climbing to Rs 973989 crore in 2025ndash26 and crossing the Rs 11 lakh crore mark in 2026ndash27Infrastructure spending driving borrowingOfficials said the increase in borrowing is closely linked to the state governmentrsquos aggressive push for infrastructure developmentOver the past few years Maharashtra has invested heavily in metro rail projects expressways irrigation works and large urban infrastructure initiatives particularly in the Mumbai Metropolitan Region MMRThese projects are expected to improve connectivity strengthen economic activity and create employment opportunities across the stateWelfare schemes also add to financial pressureAlongside infrastructure spending the government has expanded several welfare initiatives which have also increased fiscal pressureSchemes such as the Mukhyamantri Majhi Ladki Bahin Yojana which provides financial assistance to women and subsidies and loan relief measures for farmers have contributed to higher government expenditureAccording to the budget documents the state government will continue to rely on borrowing to meet its spending requirements in the coming yearsBorrowing expected to reach Rs 15 lakh croreFor the financial year 2026ndash27 Maharashtra is expected to raise around Rs 15 lakh crore through loans and other liabilitiesMost of this borrowing will come through state government bonds issued in the open market while the remaining funds will be sourced from Central government loans and other financial institutionsAs borrowing increases the cost of servicing the debt is also rising The budget estimates that interest payments alone will reach Rs 70055 crore in 2026ndash27Debt level still within fiscal limitsDespite the increase in borrowing the state government maintains that Maharashtrarsquos debt remains within manageable limits relative to the size of its economyAccording to the Medium Term Fiscal Policy Strategy Statement presented with the budget the government aims to keep the statersquos debt below 25 per cent of the GSDPThe debttoGSDP ratio is projected to be around 2038 per cent in 2026ndash27 which is within the fiscal responsibility frameworkThe fiscal deficit is also expected to remain under control with projections indicating that it will stay between 27 and 29 per cent of GSDP over the next two years below the 3 per cent limit set under fiscal rulesRising state borrowing a national trendThe increase in Maharashtrarsquos debt reflects a broader trend across several Indian statesFollowing the COVID19 pandemic many large states such as Punjab Rajasthan and West Bengal have witnessed a rise in borrowing due to increased spending on welfare programmes and infrastructure developmentAccording to assessments by the Reserve Bank of India RBI the combined debt of Indian states could remain between 28 and 30 per cent of the national GDP in the coming yearsHowever officials note that Maharashtrarsquos large economy and relatively strong tax revenue base help maintain fiscal stability despite the rising debt levels