Mumbai, September 17 (Daily Kiran) : Maharashtra’s Chief Minister Devendra Fadnavis has announced the formation of the “Maharashtra Sustainable Public Finance Committee” to bolster the state’s financial status and support its long-term development roadmap. This high-level panel, chaired by renowned economist and former Union Finance Secretary Dr. Vijay Kelkar, was unveiled late Wednesday. Its primary task is to propose measures for ensuring sustainable growth in both tax and non-tax revenue.
This initiative is a key component of the state’s “Developed Maharashtra 2047” vision document. The document outlines a strategic roadmap to elevate the state’s economy to $1 trillion by 2030 and $5 trillion by 2047, coinciding with the centenary of India’s independence.
The panel’s responsibilities include modernizing the tax system, preventing revenue loss, rationalizing tax rates, fees, and exemptions, and identifying new revenue sources. It will also focus on maximizing returns from public assets and state-owned enterprises while balancing mandatory expenditures such as salaries, pensions, interest payments, and welfare schemes. Additionally, the panel aims to create a fiscally responsible roadmap that minimizes reliance on debt for infrastructure projects and budget deficits.
The Kelkar Committee comprises notable members including Prof. Karthik Muralidharan (founder-director, CEGIS), Dr. Nitin Kareer (former Chief Secretary of Maharashtra), T. Ravi Shankar (former Deputy Governor of the Reserve Bank of India), and Dr. Ashima Goyal (President, Indian Econometric Society).
This panel comes at a crucial time for Maharashtra, which is actively pursuing investment-based growth strategies in key areas such as infrastructure, human resource development, water security, urban management, and energy transition, while also facing rising financial challenges.
The state’s vision document suggests aligning government spending policies with long-term capital formation and identifying alternative financing models and private capital flows. Fiscal deficit targets are set within the framework of the Fiscal Responsibility and Budget Management (FRBM) Act, aiming for a deficit of 2.8% to 3.0% of Gross State Domestic Product (GSDP) and keeping the revenue deficit below 0.7% of GSDP. Progress towards these targets is monitored quarterly by the “Vision Management Unit,” chaired by the Chief Minister.
Due to increasing expenditures on welfare schemes and debt repayment costs, meeting the targets set under the FRBM Act has been challenging. Consequently, the government has often had to resort to market borrowing to fund capital projects and address short-term cash shortages.
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