External loans to Maharashtra -Departments after approval of the CMS: Govt Order

Mumbai, April 9 (PTI) All departments in Maharashtra will have to submit a preliminary project report to the Chief Minister for approval to utilize external plans of multilateral, bilateral and international financing agencies, according to a government order. The external loans should not be treated as a source to meet financial needs, and it must be ensured that they are within fiscal deficit, a government resolution (GR) issued by the Department of Finance on Tuesday said. Negotiations and loan agreement must be made with the approval of the state cabinet, the order states. “While I have raised external help, it must be ensured that fiscal deficit will remain within limits of the FRBM Act and also within limits of the net loan ceiling approved by the central government,” it states. According to the Fiscal Responsibility and Budget Management (FRBM) Act, the government must limit the fiscal deficit to 3 percent of gross state’s domestic product (GSDP). In the 2025-26 budget, the state managed to hold the fiscal deficit at 2.7 percent, slightly lower than the 2.9 percent in the previous fiscal. According to the government, the external loans should not be treated as a source to meet financial needs. A preliminary project report compiled in assistance with the Maharashtra Institute for Transformation (Mitra) must be submitted to the Chief Minister, and then the report must be uploaded to the Central Government Department of Economic Affairs (DEA) website. Once approved by the DEA’s screening committee, a detailed project report (DPR) will be submitted to the central government and the funding agencies for various infrastructure and socially relevant projects, the order states. The DPR must adequately reflect the strategic elements of techno-economic, ecological, socio-cultural, institutional dimensions in the project design, it says. An objective oriented project design along with a work plan, costs and time schedule must be part of the DPR, the order states. Negotiations, loan agreement must be made with the approval of the State Cabinet, and the report taken must be submitted to the Union Ministry of Finance. Care must be taken that the project is completed in time, the order says. In the more than £ 7,00,020 Crore Maharashtra budget for the fiscal 2025-26 hosted last month by Finance Minister Ajit Pawar, the government predicted a £ 45,891 income deficit and a fiscal deficit of more than £ 1,36,000. Revenue receipts are expected to be more than £ 5,60,000. The Deputy Chief Minister Pawar said the government was successful in keeping the fiscal deficit below 3 percent of the GSDP, and the state’s revenue deficit was constantly less than 1 percent of gross government revenue.