Nagpur: The revision of Goods and Services Tax (GST) slabs two months ago is expected to cost Maharashtra around ₹15,000 crore annually, deputy chief minister Ajit Pawar said on Tuesday, underlining the fiscal pressure on the cash-strapped state.
Speaking to reporters on the sidelines of the ongoing winter session of the state legislature in Nagpur, Pawar said the government was tapping additional revenue from sectors such as excise and mining to offset the losses.
He acknowledged that the state’s finances were under strain due to various welfare schemes announced ahead of last year’s assembly elections, but maintained that the Mahayuti government was managing to strike a balance.
“It is true that the [state’s] debt burden is expected to be over ₹9.32 lakh crore, but Maharashtra is among only three states, along with Gujarat and Odisha, to retain it under the set parameters,” Pawar told reporters. “We are tapping various resources to increase the revenue. Although changes in the GST come under the central government’s purview, our endeavour would be to plug the leakages and ensure that there is no evasion in the GST collection. We have been successfully doing this successfully, but there is still room for more [revenue] generation.”
In September, the Centre overhauled the GST structure by consolidating multiple slabs into a simplified two-rate system of 5% and 18%, lowering taxes on several essential goods and consumer durables. The changes will lead to a drop in tax generation in Maharashtra, too, with the state government expecting to collect an estimated ₹1.76 lakh crore from GST in FY 2025-26, compared with ₹1.55 lakh crore the previous year.
To bridge the gap, Pawar stated that the state government plans to introduce minor changes to excise duties and rules to increase revenue. “By changing the duty on the liquor brought from outside the state, we could plug the inflow of the liquor from outside the state, resulting in revenue. Such steps in excise and even in mining will help us in increasing the revenue,” he said.
Pawar also said the government would crack down on public drinking outside liquor shops. “We are issuing a circular soon to curb this menace. The licences of such liquor shops would be suspended. We have already announced that new liquor shops would be required to obtain a no-objection certificate from housing societies before opening. This would help in reducing the menace of public drinking.”
When asked about the government’s decision to take over hearing powers in stamp duty-related disputes instead of the inspector general of registration, Pawar said the change followed established practice. “Similar powers exist with ministers in other departments, including cooperation. These provisions help deliver quicker decisions to citizens and are not meant to benefit any individual,” he said.
The fiscal stress mentioned by Pawar comes against the backdrop of the Maharashtra government tabling a supplementary budget of ₹75,286 crore during the monsoon session earlier this week. This accounts for 17.52% of the state’s annual budget and is the second-highest ever tabled at one go in Maharashtra’s history.
The state government had tabled supplementary demands of ₹57,509 crore in the monsoon session in July, taking the total of the two supplementary budgets to ₹1.33 lakh crore against the annual budget of ₹7.57 lakh crore.
In July 2024, the Eknath Shinde government had tabled the highest-ever supplementary budget of ₹94,889 crore after announcing its vote-catching schemes such as Ladki Bahin and Annapurna Yojana just two months before the assembly polls.