Mumbai: The cash-strapped Maharashtra govt whose debt projection for 2026-27 has hit an all-time high of Rs 11 lakh crore, climbing by Rs 1.7 lakh crore in just one year, has decided to fulfil its election promise by introducing a farm loan waiver in the budget tabled in the state assembly on Friday. The Punyashlok Ahilyadevi Holkar Farmers Loan Waiver Scheme is the third farm loan waiver introduced by the state in the past decade. It will provide a debt waiver of Rs 2 lakh to eligible farmers who have overdue crop loans by Sept 30, 2025. Eligible farmers who make regular loan repayments will receive an incentive of Rs 50,000.The state’s finances have been severely strained especially since 2024 when the Mahayuti govt introduced a host of pre-poll sops which helped it return to power in the state. The state had been on the backfoot about when it would implement the farm loan waiver, which was on the Mahayuti alliance’s manifesto.The payout for existing pre-poll schemes left the govt with little elbow room for major announcements in the budget. Indeed, it has not yet committed to when the loan waiver will begin. It had set up a committee for recommendations on the agricultural crisis which has to submit its report by April 30. The details of the waiver will be announced after its report. In terms of taxes, the budget doubles environment tax on private vehicles causing air pollution. It offers a 16%-30% concession on motor vehicle tax on the purchase of new vehicles after scrapping old ones which do not adhere to emission norms.Chief minister Devendra Fadnavis who presented the budget said that the state’s flagship pre-poll scheme, the Mukhya Mantri Majhi Ladki Bahin Yojana will continue. Sources, however, say the outlay has been reduced from Rs 35,000 crore last year to Rs 27,000 crore this year as the state has trimmed beneficiaries.Fadnavis dedicated the budget to the late deputy chief minister Ajit Pawar who held the finance portfolio till his death in an air-crash on Feb 28. As he began speaking, slogans of “Ajitdada amar rahe” were raised by NCP MLAs. Fadnavis announced a memorial in Pawar’s honour and also the “Dynamic Civil Services” award in his name.Speaking to the media on the details of the farm loan waiver scheme, Fadnavis said, “So far the committee has details of 28-30 lakh farmers. In the earlier loan waiver, benefits were provided to 20 lakh farmers and incentives to 15 lakh farmers. So this could be in the same region. But the details will be clear after the committee’s report.” He said the waiver will not be restrictive and will be provided to ordinary farmers. “It is not for the benefit of banks but to make indebted farmers eligible for fresh crop loans,” he said.The Mahayuti govt has come under attack for its galloping debt which has more than tripled over the last decade. However, Fadnavis said that of the Rs 11 lakh crore, debt around Rs 90,000 crore would be settled by the Centre owing to its transfers to the state. Officials also claim that the debt figure has climbed by Rs 1.7 lakh crore in a year because the debt of state agencies and the burden of long-term debt has been taken into account. The state’s revenue deficit projection is Rs 40,522 crore. This is the gap between its income and expenditure.Fadnavis said that debt cannot be considered in isolation but as a share of GSDP. “The state’s fiscal deficit and debt is within fiscal limits. The fiscal deficit is within 3% of GSDP. Maharashtra is the only large state that remains within the limit,” said Fadnavis. He said the state would focus on raising its revenue and increasing the outlay on infrastructure projects to provide an impetus for economic growth.Although debt has galloped, the state has not cut down on capital expenditure which goes into funding development projects. The projected capital expenditure has risen from Rs 93,165 lakh crore in 2025-26 to Rs 1.2 lakh crore in this budget.The budget provides Rs 20,000 crore to a free power scheme for farmers with agricultural pumps upto 7.5 hp—another pre-poll scheme introduced in 2024. Natural farming will be introduced on 5 lakh hectares of land and farm labourers will be included in the Gopinath Munde accident scheme. A Rs 300 crore tree plantation drive will be undertaken to increase green cover in the state.On the industry front, MSME centres will be established in every district. For the services sector, 400 new global competence centres will be set up. Around 130 acres of land will be allotted to set up a world-class start up and innovation hub at Wadala.“This budget and each budget in the forthcoming years will reflect the resolve of Viksit Maharashtra. We want to achieve the aim of taking the state’s economy to $5 trillion. The four main pillars to promote regional balanced development of the state are progressive, sustainable, inclusion and good governance,” said Fadnavis in his budget speech. The budget also declared 2026-27 as a year of social harmony and equality in which funds will be provided to commemorate reformers including Mahatma Phule, Sant Gadge Baba and Babasaheb Ambedkar.
