MUMBAI: As soon as he began reviewing preparations for the state budget for 2026-2027, chief minister Devendra Fadnavis ordered a freeze on new procurement and expenditure proposals from February 15. The idea is to stop last-minute and non-priority spending.
The directive is important considering the financial stresses faced by the state since the introduction of the Mukhyamantri Majhi Ladki Bahin Yojana, the Mahayuti government’s flagship scheme, which grants $1,500 per month to around 2.25 crore economically disadvantaged women in the state.
Fadnavis said no new proposals or tenders related to procurement and expenditure will be accepted after the specified date. Only proposals involving urgent needs will be considered, subject to approval by the finance department. The acquisition of medicines has been exempted from freezing.
Various government departments are expected to plan their expenditure based on available cash flow while implementing budget provisions. However, several departments tend to incur large expenses in the last three months of the financial year, prompting the government to introduce stricter controls.
“Effective February 15, all administrative departments will not approve any new procurement proposal for the financial year 2025-26,” said an order issued by the state finance department. “Proposals relating to furniture repair, repair of photocopiers, computers, equipment and spare parts, organization of workshops and seminars, rental of offices and similar activities will not be approved and should not be sent to the finance department,” it states.
“This will significantly reduce last-minute spending by departments, which often leads to unnecessary expenditure simply to prevent budget allocations from lapsing. It may also result in a substantial portion of budget provisions remaining unspent,” said a senior official in the state finance department.
An exception has been made for the purchase of medicines within the limits of available funds. The restrictions will also not apply to centrally sponsored schemes, equivalent participation of the State in such schemes and procurement under externally assisted projects, the order states.
Purchase proposals within the framework of the district annual plan and local development funds of public representatives may be submitted to the finance department, which will make a decision on a case-by-case basis, the order states.
Additionally, it states that no administrative approval will be granted for purchase proposals after February 15, even in cases where approval is obtained. The departments will not be able to carry out tenders.
The directive will remain in force from February 15 to March 31 and is applicable only in this financial year. “The prime minister also ordered that proposals that have any kind of urgency go through the finance department for approval,” another senior official revealed.
The order was issued in the backdrop of a comptroller and auditor general (CAG) report tabled during the winter session of the state legislature, in which the state government was accused of fiscal imbalance in fiscal years 2024-25. The report emphasized “spending waste and failure to execute” and highlighted underspending of revenues and much lower than budgeted capital expenditures.
