Maharashtra Eyes Rs 30,000 Crore Infra Push With Off-Budget Financing—What You Need To Know

Maharashtra will raise and spend nearly Rs 30,000 crore over the next two to five years on a set of infrastructure projects aimed at boosting long-term growth, according to Praveen Pardeshi, the newly appointed Chief Economic Advisor (CEA) to Chief Minister Devendra Fadnavis.

In a bid to tackle the rising gap between revenue and capital expenditure, the state plans to fund these initiatives through off-budget sources without imposing additional burden on taxpayers.

The key projects identified include the completion of 140 stalled irrigation projects, the construction of 7,000 km of concretised rural roads, and the establishment of sewage treatment plants in 490 small towns across the state.

“Capital expenditure in the state is only about 27 per cent. If you aim for a one trillion dollar economy, the investment has to go on capital formation. While we cannot cut revenue expenditure, we are working on raising the capital expenditure without burdening the taxpayer, through off-budget financing," Pardeshi was quoted as saying by Indian Express.

Pardeshi, whose role is only advisory in nature, is the first CEA to the CM appointed in the state.

"While we are taking Rs 15,000 crore from NABARD for the completion of 140 stalled irrigation projects over the next two years, we are getting about Rs 8,000 crore from Asian Development Bank for building 7,000 km of concrete roads to connect 3,920 villages (with population of more than 1,000) to the national highways. We are also taking Rs 7,000 crore from the BRICKS bank for this project,” Pardeshi added.

Pardeshi noted that since these are dedicated funds, they cannot be diverted for other purposes and hence will lead to time-bound completion of projects at hand.

He pointed out that some of the irrigation projects have been pending since the 1980s and 1990s.

The Maharashtra CEA also pointed out the lack of data to figure out the contribution of districts to the state GDP, and said that he is working on data-driven decision-making.

According to Pardeshi, while Mumbai, Pune, and Thane collectively contribute 54 per cent to the Maharashtra’s GDP, the remaining 32 districts of the state make up 46 per cent.

“Our aim is to plan how each of these districts contribute to their full potential. We know the size of Maharashtra’s GDP, but district GDP is a guesstimate, made on a weighted average. There is no bottom-up measurement of the GDP of any district," he said.

To address this gap, the state government is setting up a State Data Authority under the Maharashtra Institution for Transformation (MITRA), which will facilitate data-driven decision-making.

"The aim is to have data-driven decision-making and accordingly focus on augmenting their GDP contribution,” he added.

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