Maharashtra’s latest budget has introduced tax hikes on CNG vehicles and luxury electric cars while cutting back on social welfare schemes to manage rising debt. The budget, presented amid financial constraints, signals a cautious approach to revenue generation and expenditure.
Higher taxes on CNG and luxury EVs
Car buyers in Maharashtra will now have to shell out more for CNG and high-end electric vehicles (EVs). The government has increased taxation on these categories as part of efforts to boost revenue. While CNG vehicles were once an affordable alternative to petrol and diesel cars, the new tax may dampen demand. Luxury EVs, which had been gaining popularity among high-income consumers, will also see increased costs.
The decision comes as a contrast to previous policies promoting green energy and sustainable transport. Industry experts fear the move could slow the adoption of EVs, which rely heavily on subsidies and incentives for market growth.
Welfare schemes face budget cuts
As part of its cost-cutting measures, the Maharashtra government has significantly reduced allocations to the Ladki Bahin Yojna, a scheme aimed at empowering women. The programme, designed to provide financial assistance, has seen its funding slashed due to budgetary constraints.
Additionally, the government has stalled a previously planned farm loan waiver, citing rising debt burdens. Many farmers, who were expecting relief, are now left uncertain about their financial future.
Balancing fiscal deficit amid political challenges
The budget reflects a defensive financial stance as the state grapples with mounting debt and reduced central allocations. The government is walking a tightrope, attempting to raise revenue while ensuring essential welfare initiatives remain functional.
However, opposition parties and activists have criticised the budget, arguing that it prioritises taxation over public welfare. Critics warn that reducing welfare spending and increasing taxes on alternative energy vehicles could hurt both consumers and businesses in the long run.
With state elections approaching, the impact of these budgetary decisions will be closely monitored. Whether Maharashtra can balance fiscal discipline with economic growth remains to be seen.
