Gujarat Budget Analysis 2025-26

The Finance Minister of Gujarat, Mr. Kanubhai Desai, presented the Budget for the state for the financial year 2025-26 on February 20, 2025.

Budget Highlights

• Expenditure (excluding debt repayment) in 2025-26 is estimated to be Rs 3,32,150 crore, an increase of 17% from the revised estimates of 2024-25.  In addition, debt of Rs 33,596 crore will be repaid by the state.

• Receipts (excluding borrowings) for 2025-26 are estimated to be Rs 2,73,753 crore, an increase of 17% as compared to the revised estimate of 2024-25. 

• Revenue surplus in 2025-26 is estimated to be 0.7% of GSDP (Rs 19,695 crore), as compared to a revenue surplus of 0.8% of GSDP (Rs 21,350 crore) at the revised estimate stage in 2024-25.  

• Fiscal deficit for 2025-26 is targeted at 2% of GSDP (Rs 58,397 crore).   In 2024-25, as per the revised estimates, fiscal deficit is expected to be 1.9% of GSDP, similar as budgeted (1.9% of GSDP).

Policy Highlights

• Food security:  Shramik Annapurna Yojana will be expanded to cover construction and industrial workers.   The scheme provides food to labourers at affordable rates. 

• Economic growth:  Six growth hubs will be identified across the state.  These will include Surat, Ahmedabad, Vadodara and the Kutch and coastal Saurashtra region.  

• Reduction of stamp duty:  Stamp duties have been reduced on deeds for: (i) release of ancestral property, (ii) mortgage, and (iii) lease of less than a year.   

• Motor vehicle tax:  A uniform motor vehicle tax of 6% will replace existing slabs of 8% and 12%.   Fully battery-operated vehicles will receive a rebate of up to 5% of motor vehicle tax paid. 

• Assistance to the disabled:  Currently, persons with 80% or higher disability are eligible for assistance of Rs 12,000 annually.  This will be expanded to include persons with 60% or higher disability. 

• Fish farming:  A non-agricultural permit will no longer be required for fishing on farm land.  

• Tourism:   About 150 roads will be constructed to connect key tourist destinations.  200 new premium AC buses and 10 new caravans will be launched.  These buses will connect 25 tourist and pilgrimage destinations.  Infrastructure in key pilgrimage destinations will be improved.  

Gujarat’s Economy GSDP:  In 2023-24, Gujarat’s GSDP (at constant prices) is estimated to grow by 8.9% over the previous year.  In comparison, India’s GDP is estimated to grow by 8.2% in 2023-24.  Sectors:  In 2023-24, agriculture, manufacturing, and services sectors are estimated to contribute 20%, 44%, and 36% of Gujarat’s economy, respectively (at current prices).  In 2023-24, agriculture, manufacturing and services in Gujarat grew by 3.5%, 11.3% and 9.2% over 2022-23.   Per capita GSDP:  In 2023-24, Gujarat’s per capita GSDP (at current prices) is estimated to be Rs 3,36,875, an increase of 9% over 2022-23.  In 2023-24, India’s per capita GDP is estimated to increase by 8.6% over 2022-23 to Rs 2,11,725.

Figure 1: Gujarat’s GSDP at constant prices (2011-12)    Note: These numbers are as per constant prices (2011-12) which implies that the growth rate is adjusted for inflation. Sources: MoSPI; PRS.

 Budget Estimates for 2025-26

• Total expenditure (excluding debt repayment) in 2025-26 is targeted at Rs 3,32,150 crore.  This is an increase of 17% from the revised estimate of 2024-25.  This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 2,73,753 crore and net borrowings of Rs 55,905 crore.  Total receipts for 2025-26 (other than borrowings) are expected to register an increase of 17% over the revised estimate of 2024-25.
• The state estimates a revenue surplus of 0.7% of GSDP (Rs 19,695 crore) in 2025-26, as compared to a surplus of 0.8% of GSDP (Rs 21,350 crore) at the revised estimate stage of 2024-25.  
• Fiscal deficit for 2025-26 is targeted at 2% of GSDP (Rs 58,397 crore), higher than the revised estimates for 2024-25 (1.9% of GSDP).  For 2025-26, central government has permitted fiscal deficit upto 3% of GSDP to states.   Additional borrowing space of 0.5% of GSDP will be available on undertaking certain power sector reforms.   

Table 1: Budget 2025-26 - Key figures (in Rs crore)

Items	2023-24 Actuals	2024-25 Budgeted	2024-25 Revised	% change from BE 24-25 to RE 24-25	2025-26 Budgeted	% change from RE 24-25 to BE 25-26
Total Expenditure	2,73,768	3,28,447	3,12,988	-5%	3,65,746	17%
(-) Repayment of debt	26,136	29,085	29,086	0%	33,596	16%
Net Expenditure (E)	2,47,632	2,99,362	2,83,902	-5%	3,32,150	17%
Total Receipts	2,64,530	3,24,945	3,09,332	-5%	3,63,254	17%
(-) Borrowings	40,392	77,500	76,001	-2%	89,501	18%
of which central capex loans*	4,254	4,000	6,000	50%	6,000	0%
Net Receipts (R)	2,24,138	2,47,445	2,33,331	-6%	2,73,753	17%
Fiscal Deficit (E-R)	23,493	51,917	50,570	-3%	58,397	15%
as % of GSDP	1.0%	1.9%	1.9%		2.0%
Revenue Surplus	33,477	9,821	21,350	117%	19,695	-8%
as % of GSDP	1.4%	0.4%	0.8%		0.7%
Primary Deficit	-3,682	21,693	21,683	0%	27,197	24%
as % of GSDP	-0.2%	0.8%	0.8%		0.9%
GSDP	24,25,804	27,92,545	26,72,072	-4%	29,82,032	12%

Note: BE is Budget Estimates; RE is Revised Estimates.  *Central government has been providing 50-year interest-free loans to state governments for capital expenditure since 2020-21.  These loans are excluded from the calculation of the state's borrowing ceiling.
Sources: Annual Financial Statement, Gujarat Budget Documents 2025-26; PRS.

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