No More 20% Extra Funds for Naxal-Affected Areas: Maharashtra Government Scraps Special Infrastructure Allowance

Public Works Department Phasing Out Additional Funds Due to Decline in Naxal Influence; Complete Cessation Set for April 2027

Mumbai, August 14: Construction projects and public infrastructure developments in Naxal-affected belts of Maharashtra will no longer enjoy the extra financial cushion previously provided by the state government. The Maharashtra Public Works Department (PWD) has officially issued an order to phase out and completely abolish the 20% additional charge previously levied on tender rates for works in Left-Wing Extremism (LWE) affected areas.

Historically, under the State Rate Schedule (2022-23), the PWD made a special provision allowing an additional 20% allowance on construction estimates in Naxal-affected regions. This was intended to compensate contractors for high operational risks, security concerns, and logistical hurdles. However, following a significant decline in insurgency and marked ground-level security improvements, the District Collector of Gadchiroli brought it to the government’s attention that Gadchiroli has been reclassified by the Union Ministry of Home Affairs from a “Most Affected District” to a “Legacy and Thrust District”.

The district administration highlighted that continuing the 20% surcharge was no longer justified given the improved law-and-order situation, and it was merely resulting in an unnecessary escalation of project costs. Taking note of these recommendations, the PWD issued an official government circular on August 13, 2026, outlining a phased withdrawal of these extra funds.

For the current fiscal year 2026–27, the additional surcharge in the State Rate Schedule for Naxal-affected areas has been drastically reduced from 20% to just 5%. Starting from the next fiscal year 2027–28, effective April 1, 2027, the extra provision will be fully abolished, bringing construction rates in former Naxal-affected belts entirely at par with the rest of the state. This decision marks a major administrative milestone, reflecting both the restored peace and stability in districts like Gadchiroli and the state’s intent to curb inflated public works spending.