‘SC-ST funds are never released in full by the finance department’

By Admin

06 May, 2025

The recent diversion of ₹746 crore meant for Scheduled Castes (SCs) and Scheduled Tribes (STs) to the Ladki Bahin scheme has not only triggered political tensions but also spotlighted a chronic and systemic issue — the persistent shortfall in the release and utilization of SC-ST welfare funds by the finance department in Maharashtra.

Routine Underspending and Diversion

While the public outcry over this particular diversion has been loud, data reveals a concerning trend: year after year, the departments responsible for the welfare of SCs and STs spend less than 75% of their allocated budgets. This isn’t due to inefficiency, but because the finance department routinely fails to release the full funds. For instance, in FY 2024-25, the actual spending on SCs was ₹21,122 crore out of ₹28,118 crore, and for STs, it was ₹16,948 crore out of ₹22,208 crore. A similar pattern was observed in FY 2023-24. The consistent gap between allocations and actual expenditure undermines the state’s commitment to social justice.

The Ladki Bahin Controversy

In a controversial move, the Maharashtra government recently ordered the diversion of ₹410.30 crore from the social justice department and ₹335.70 crore from the tribal development department to fund the Ladki Bahin Yojana. This sparked outrage among SC and ST communities, as funds meant specifically for their development — allocated proportionally based on their population — are not legally or ethically meant to be repurposed.

Social justice minister Sanjay Shirsat vocally opposed the move, indirectly blaming Deputy CM and Finance Minister Ajit Pawar by referring to him as the “finance department’s Shakuni.” The opposition from the NCP was swift, with leaders defending Pawar and insisting that the funds were not being diverted for personal gains but due to budgetary constraints.

The Human Cost of Budgetary Neglect

The consequences of these financial diversions are not merely statistical — they affect real lives. Officials have pointed out that scholarship disbursals are frequently delayed and critical infrastructure projects like hostel construction are jeopardized. For instance, a plan to spend ₹1,200 crore on hostel construction is already under threat because ₹410 crore was diverted in the very first month of the fiscal year.

The finance department’s lack of commitment to releasing full allocations hinders the progress of educational and residential facilities for SC and ST students, who rely heavily on these state-sponsored programs for upward mobility and equal opportunity.

Need for Legislative Protection

In states like Andhra Pradesh, Karnataka, and Telangana, laws mandate that funds for SCs and STs be allocated in direct proportion to their population and prohibit the lapse or diversion of unspent funds. These models serve as a beacon of what Maharashtra could emulate. Shirsat has rightly pointed out the need for similar legislation in Maharashtra to safeguard SC-ST allocations from arbitrary diversions and ensure long-term accountability.

Accountability from the Finance Department

Rupesh Keer of the NGO Samarthan notes that even the Comptroller and Auditor General (CAG) criticized the Maharashtra government last year for failing to release allocated funds for backward classes. It is now widely recognized that the finance department, rather than the implementing departments, is responsible for the underperformance and erosion of these social justice programs.

Final Blow: Broken Promises on Ladki Bahin Scheme

Ironically, the Ladki Bahin scheme — for which the SC-ST funds were diverted — is itself under financial stress. Minister Shirsat admitted the stipend cannot be increased to ₹2,100 as promised during elections due to budgetary constraints. He noted that while the scheme will continue, it may require borrowing, further straining public finances and revealing the shortsightedness of election-time promises.

Conclusion: A Call for Reform

The recurring shortfall in fund releases for SCs and STs is not just a fiscal issue — it is a social injustice. Diverting funds meant for historically marginalized communities for political schemes betrays the constitutional mandate of equitable development. Maharashtra must now consider legislative reform, ensure transparent fund allocation, and hold the finance department accountable if it wishes to uphold its commitment to social equity and justice.