Industry, Services, State Finance & Welfare Schemes of Maharashtra — Practice

Question 1

Name four national financial institutions headquartered in Mumbai.

Accepted Answer

The Reserve Bank of India, SEBI, the Bombay Stock Exchange and the National Stock Exchange.

Question 2

What is the Mukhyamantri Majhi Ladki Bahin Yojana?

Accepted Answer

A state scheme launched in July 2024 that pays a monthly cash transfer, 1,500 rupees at launch, to eligible women aged 21 to 65 from families with annual income below 2.5 lakh rupees.

Question 3

Which constitutional article caps the professional tax, and at what amount?

Accepted Answer

Article 276, at 2,500 rupees per person per year.

Question 4

What fiscal deficit ceiling does Maharashtra's FRBM Act set?

Accepted Answer

Three per cent of GSDP, under the Maharashtra Fiscal Responsibility and Budgetary Management Act, 2005.

Question 5

Why does investment in Maharashtra remain concentrated, and how has the state tried to spread it? (~150 words)

Accepted Answer

Investment favours the Mumbai-Pune-Nashik triangle because of the ports and airport, the financial centre, skilled labour, suppliers and early infrastructure. Foreign investment figures exaggerate this further, because inflows are recorded where headquarters sit. The state has tried to spread investment through higher incentives in less developed talukas under its industrial policies, industrial nodes such as AURIC at Chhatrapati Sambhajinagar and MIHAN at Nagpur, MIDC estates in every district, and connectivity such as the Samruddhi Mahamarg linking Mumbai to Nagpur. New hubs have grown, but the gap persists, which suggests that skills, water and urban amenities in the lagging regions matter as much as incentives.

Question 6

What is the Namo Shetkari Mahasanman Nidhi, and whom does it miss?

Accepted Answer

A 2023 state income-support transfer added to PM-KISAN for enrolled farmers. Because it follows landholding records, it misses tenants and landless labourers.

Question 7

Describe the structure of Maharashtra's own tax revenue. (~150 words)

Accepted Answer

Maharashtra's own taxes are led by state GST, which it shares with the Centre on intra-state supplies. Stamp duty and registration fees are unusually large because of the size of the property markets in Mumbai and Pune. State excise on liquor, sales tax on petroleum products outside GST, and electricity duty are other major sources. The professional tax, capped at 2,500 rupees a year by Article 276, has been levied since the 1970s. Central transfers add a share of central taxes under the Finance Commission and grants. The budget's pressure comes from committed spending on salaries, pensions and interest, which leaves limited room for capital expenditure as welfare transfers grow.

Question 8

Evaluate the shift towards direct cash transfers in Maharashtra's welfare policy. (~250 words)

Accepted Answer

Maharashtra's welfare has moved from subsidised goods and services towards direct transfers, most visibly the Ladki Bahin scheme of 2024, which pays a monthly sum to women from lower-income families, and the Namo Shetkari transfer of 2023 to farmers. The case for transfers is strong. DBT through Aadhaar-linked bank accounts reduces leakage, respects the beneficiary's choices and reaches large numbers quickly, and transfers to women can raise their say in household spending, with benefits for nutrition and children. There are three concerns. First, fiscal cost: large recurring transfers compete with capital spending on irrigation, roads and schools, which build long-term capacity. Second, targeting: income-based eligibility is hard to verify, as the fall in beneficiaries after verification drives showed, and transfers tied to land records miss tenants and landless labourers. Third, substitution: cash cannot replace public health, schooling and water. The balance lies in treating transfers as a floor rather than a substitute: fund them within the fiscal rules, verify eligibility transparently, measure outcomes such as women's nutrition and savings, and protect capital spending. Transfers work best alongside strong public services.

Question 9

Assess Mumbai's role in Maharashtra's and India's economy. (~150 words)

Accepted Answer

Mumbai is India's financial capital, home to the RBI, SEBI, the BSE and NSE and most large banks and insurers, and the Bandra-Kurla Complex is its business district. Its ports, including the Jawaharlal Nehru Port, handle a large share of India's container trade, and it is the centre of the film and media industry. For Maharashtra, the city and its region generate a large share of output and tax revenue, especially stamp duty and GST. The costs are congestion, housing shortage and a large informal settlement population, and the concentration of growth in one metropolis widens regional gaps. New infrastructure such as the Atal Setu, the Navi Mumbai airport and metro lines aims to spread the region's growth, but balanced development requires growth centres beyond it.

Practice — Industry, Services, State Finance & Welfare Schemes of Maharashtra

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