Key Details
The audit assesses Maharashtra’s fiscal performance, debt sustainability and public financial management, showing that strong macroeconomic performance coexists with emerging structural fiscal pressures and significant accounting backlogs.
Key Area | Main Detail | Why It Matters |
|---|---|---|
Economic Performance | GSDP reached ₹45.31 lakh crore, growing 11.73%, contributing 13.7% to India’s GDP. | Reinforces Maharashtra’s position as India’s largest state economy. |
Economic Structure | Per capita income stood at ₹3.54 lakh, while the services sector contributed 64% of GSVA. | Highlights a high-income, service-led economy with a diversified production base. |
Fiscal Balance | Revenue deficit increased to ₹29,994.76 crore (0.66% of GSDP), while fiscal deficit remained 2.74% of GSDP, within the FRBM ceiling. | Indicates that fiscal rules are being met despite growing structural revenue pressures. |
Debt Sustainability | Public debt remained at 18.96% of GSDP, below the 25% prudential limit, but debt servicing absorbed 34.97% of revenue receipts. | Shows manageable debt levels alongside increasing repayment obligations. |
Financial Management | Pending Utilisation Certificates (₹40,097.59 crore), Personal Deposit balances (₹37,669.41 crore), DC Bills (₹3,532.05 crore) and other unreconciled accounts remain unresolved. | Weakens fiscal transparency, expenditure accountability and legislative oversight. |
Maharashtra Continues to Anchor India’s Economy
The CAG’s State Finances Audit Report 2024–25 shows that Maharashtra remained India’s largest state economy during 2024–25, with Gross State Domestic Product (GSDP) reaching ₹45.31 lakh crore after growing by 11.73%. The state contributed 13.7% of India’s GDP, while per capita income rose to ₹3.54 lakh, significantly above the national average.
The state’s economy continues to be driven by services, which accounted for 64% of Gross State Value Added (GSVA), followed by industry (23%) and agriculture (13%). Revenue receipts also increased by 11.92% to ₹4.82 lakh crore, supported mainly by higher State GST and stamp duty collections, although grants from the Union Government declined following the end of GST compensation.
The report also notes that Maharashtra’s multidimensional poverty rate stood at 7.81%, substantially below the national average of 14.96%, reflecting relatively strong development outcomes alongside sustained economic growth.
Revenue Pressures Are Beginning to Emerge
Despite robust revenue growth, the audit identifies signs of increasing fiscal stress.
The state recorded a revenue deficit of ₹29,994.76 crore, indicating that current revenues were insufficient to finance day-to-day expenditure. Revenue expenditure accounted for more than 84% of total expenditure, while capital expenditure represented only 13.64%.
Although Maharashtra continued to comply with the Fiscal Responsibility and Budget Management (FRBM)framework, maintaining a fiscal deficit of 2.74% of GSDP, the report notes that the primary deficit of ₹70,753.63 crore reflects continued dependence on borrowing beyond interest obligations.
The CAG cautions that market borrowings should increasingly finance productive capital investment rather than recurring revenue expenditure to strengthen long-term fiscal sustainability.
Financial Reporting Weaknesses Persist
Alongside the fiscal indicators, the audit identifies significant weaknesses in public financial management and expenditure reporting.
The report highlights pending Utilisation Certificates worth ₹40,097.59 crore, Personal Deposit balances of ₹37,669.41 crore, uncleared Detailed Contingent Bills amounting to ₹3,532.05 crore, ₹3,788.80 crore of excess expenditure awaiting legislative regularisation, and over ₹27,184 crore of unadjusted liabilities.
According to the CAG, these unresolved accounting balances weaken expenditure verification, reduce fiscal transparency and limit legislative oversight of public spending. The audit recommends strengthening expenditure reconciliation, improving departmental financial monitoring and ensuring that borrowings are increasingly directed towards long-term capital creation rather than financing routine expenditure.
What are Utilisation Certificates (UCs)?
Utilisation Certificates are financial documents submitted by departments or implementing agencies to certify that government funds have been used for their intended purpose. Pending UCs weaken expenditure verification, delay financial accountability and reduce the government’s ability to monitor the effectiveness of public spending.
Policy Relevance
The report shows that compliance with FRBM deficit and debt limits does not by itself guarantee fiscal sustainability, highlighting the importance of expenditure quality, revenue composition and financial reporting alongside headline fiscal indicators.
Rising revenue deficits indicate growing pressure on routine government finances, reinforcing the need to strengthen revenue mobilisation while containing committed expenditure and reducing reliance on borrowing for day-to-day spending.
Persistent accounting backlogs—including pending Utilisation Certificates, Personal Deposit balances and unreconciled contingent bills—undermine fiscal transparency, weaken legislative oversight and reduce confidence in public financial management.
The findings reinforce the importance of directing public borrowings towards capital formation and productive investment that strengthen long-term growth rather than financing recurring expenditure.
Maharashtra demonstrates that strong economic growth, higher incomes and relatively favourable development outcomes can coexist with emerging weaknesses in fiscal governance, underscoring the need for institutional reforms alongside macroeconomic performance.
The audit highlights the broader role of independent public financial oversight in improving budget credibility, strengthening accountability and supporting evidence-based fiscal policymaking.
Follow the Full Report Here: Report of the Comptroller and Auditor General of India on State Finance for the year 2024-25