Maharashtra Adopts New Budget Accounting System From April 2027

Maharashtra will introduce a new budget accounting system from April 1, 2027, to make public spending easier to track and compare. The state government has approved a uniform object-head structure recommended by the Comptroller and Auditor General (CAG), as per a Government Resolution issued by the Finance Department.

The new system will not introduce any new government schemes or spending allocations, but will change the accounting heads under which different types of expenditure are recorded. The Maharashtra budget accounting system will have 70 object heads covering revenue expenditure, capital expenditure, and accounting adjustments.

New categories will be created to separately capture spending on dearness allowance, medical treatment, leave travel concession, training, digital equipment, repairs and maintenance, bank and agency charges, and social security. Capital expenditure will also be classified under specific heads covering buildings, infrastructure, land, furniture, ICT equipment, and intangible assets.

Several existing expenditure heads will either be merged or reorganised. For instance, overtime allowance will come under allowances, while telephone, electricity, and water charges will be classified as office expenses. Computer-related spending will be distributed across relevant categories, including digital equipment, office expenses, materials, repairs, and ICT equipment.

The government has stated that differences between Centre and state accounting practices had previously made spending comparisons difficult. Under the revised framework, expenditure on salaries, wages, pensions, subsidies, scholarships, interest, vehicles, infrastructure, investments, and loans will follow standardised classifications.

All departments have been directed to use the revised heads while preparing Maharashtra Budget 2027-28 estimates. The move is expected to streamline budget and policy functions, making it easier to track and compare public spending.

The Comptroller and Auditor General (CAG) had previously flagged Maharashtra budget lapses, stating that deficits were understated by accounting adjustments. The new system aims to address these issues and provide a more accurate picture of the state's finances.

The introduction of the new budget accounting system is a significant step towards improving transparency and accountability in public spending. It will enable better tracking and comparison of expenditure, allowing for more informed decision-making.

The move is also expected to improve the state's financial management, enabling it to make more effective use of its resources. With the new system in place, Maharashtra will be able to better plan and allocate its budget, leading to more efficient use of public funds.

In conclusion, the introduction of the new budget accounting system in Maharashtra is a positive step towards improving the state's financial management and transparency. It will enable better tracking and comparison of public spending, leading to more informed decision-making and more effective use of resources.