The Maharashtra government approved on Thursday changes to the way it records and classifies government expenditure from April 1, 2027. The state will adopt a new accounting structure, the “uniform object-head structure”, recommended by the Comptroller and Auditor General.
The changes are aimed at making it easier to compare government spending in Maharashtra with that of the Centre and other states, according to a government resolution issued by the finance department, PTI reported.
The revised system will not introduce any new spending schemes or allocations. Instead, it will change the accounting heads under which government expenditure is recorded, ensuring that similar types of spending are grouped under common categories, the GR said.
The Finance Department said differences in the way the Centre and states classify expenditure have made it difficult to compare government spending, the PTI report added.
Under the revised system, several new categories will separately identify expenses such as dearness allowance, medical treatment, leave travel concession, training, digital equipment, repair and maintenance, bank and agency charges, and social security expenditure.
Capital expenditure will also be recorded under separate heads for buildings, infrastructure, land, furniture and fixtures, ICT equipment and intangible assets, according to the GR reported by PTI.
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The government has also removed or merged some existing heads. Overtime allowance, for instance, will be included under the broader allowances head, while telephone, electricity and water charges will be classified under office expenses.
Computer-related expenses will be distributed across relevant heads, including office expenses, digital equipment, materials and supplies, repair and maintenance, and ICT equipment.
The revised system will have 70 object heads covering revenue expenditure, capital expenditure and accounting adjustments. The heads will separately identify major areas such as salaries, wages, pensions, subsidies, scholarships, interest payments, vehicles, machinery, investments, loans, infrastructure and land.
The new classification system is expected to make government accounts easier to track and compare across states and financial years. Spending on areas such as infrastructure, salaries, subsidies and social security will be recorded under more clearly defined and standardised categories, allowing policymakers and auditors to compare similar expenditure more effectively.
The government has directed all departments to take note of the revised object heads while preparing their budget estimates for 2027-28.
The move comes amid concerns raised by the CAG over Maharashtra's finances. Last month, a CAG report tabled in the state legislature on the concluding day of the monsoon session cautioned that the state's fiscal sustainability could come under pressure due to high spending on the Mukhyamantri Majhi Ladki Bahin Yojana, growing off-budget borrowings, mounting liabilities and large amounts of unspent funds parked outside the Consolidated Fund.
The CAG's report on Maharashtra's state finances for 2024-25 said the state's actual fiscal deficit for 2024-25 breached the Fiscal Responsibility and Budget Management (FRBM) Act's 3% limit, contrary to what the state government reported in its Finance Accounts, as per a NDTV report.
The audit also highlighted Maharashtra's growing dependence on off-budget borrowings by various state agencies from government undertakings and funding agencies.
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