Gujarat Budget 2025-26 | Analysis
There is a particular kind of confidence that comes from governing a state that other states quietly envy. Recently, Gujarat’s Finance Minister Kanubhai Desai presented the state budget for 2025-26 with confidence. It has a record outlay of Rs.3.70 lakh crore, a fiscal deficit held at 2% of GSDP, and a revenue surplus still in the positive column at 0.7%, according to the Budget Speech and FRBM statement. On paper, this is a state that is doing things right.
But budgets, like people, reveal themselves not just in what they say, but in what they choose not to say. The overarching framework is Viksit Gujarat: the state’s roadmap to developed-state status by 2047, aligned with the national Viksit Bharat vision. The headline bet is on hard infrastructure: roads, ports, urban corridors and airports. The implicit argument is that physical connectivity is the surest route to economic velocity. It is an argument Gujarat has been making for two decades and the evidence has largely supported it.
Key Announcements at a Glance
(All figures as per Gujarat Budget 2025-26 documents and budget speech unless stated otherwise.)
Infrastructure & Connectivity
- Namo Shakti Expressway connecting Banaskantha (Deesa) to Pipavav Port
- Somnath-Dwarka Expressway via Ahmedabad, Rajkot and Porbandar
- Garvi Gujarat High-Speed Corridor: 1,367 km across 12 routes, Rs. 1,020 crore earmarked
- New greenfield airport at Dahod; Rs.210 crore for expansion of Porbandar, Bhavnagar and Surat airports
- Ahmedabad-Gandhinagar Metro Phase-2: Rs.2,730 crore; Surat Metro ~55% complete
- Rs.350 crore for Sabarmati Riverfront corridor connecting Ahmedabad, GIFT City and Gandhinagar
- Rs.250 crore for Navlakhi and Magdalla port development; Rs.100 crore seed fund for a new port-city
Urban Development
- 2025-26 declared Urban Development Year
- Urban allocation increased 40% to Rs.30,325 crore
- Rs.2,300 crore for infrastructure in nine newly formed municipal corporations
- 69 municipalities to be restructured
- Dedicated funding for Dwarka, Palitana, Chotila, Dakor and Vadnagar
Education
- Rs.59,999 crore allocation, the largest sectoral share
- Gujarat Institute of Technology (GIT): Rs.100 crore
- AI demonstration labs at LD Engineering College and six government institutes
- Rs.4,827 crore scholarships covering 81 lakh students
- Rs.551 crore for centralised mid-day meal kitchens across 72 talukas
Agriculture & Rural
- Rs.22,948 crore for agriculture and irrigation
- Rs.800 crore for farm mechanisation
- Fish farming on agricultural land exempted from non-agricultural land-use approval
Social Welfare
- Vanbandhu Kalyan Yojana 2: Rs.30,121 crore
- Disability assistance eligibility reduced from 80% to 60% disability
- PM Awas support raised from Rs.1.2 lakh to Rs.1.7 lakh per unit; over 3 lakh houses planned
- Shramik Annapurna Yojana expanded
Fiscal & Tax
- No new taxes
- Uniform motor vehicle tax of 6% replacing earlier slabs
- Up to 5% EV tax rebate
- Reduced stamp duty on mortgage deeds and certain property transfers
Economic Growth & Energy
- Six economic growth hubs announced
- Surat Economic Region identified by NITI Aayog as a national growth hub
- Rs.50,000 crore Viksit Gujarat Fund over five years
- Rs.12,000 crore for renewable energy
Where the Budget Gets It Right
The infrastructure logic is sound. The Namo Shakti Expressway is positioned as a strategic freight corridor linking North Gujarat to deep-water ports. If executed on schedule, it could reduce logistics costs for exporters across sectors.
The 40% rise in urban spending reflects the state’s rapid urbanisation. Declaring an Urban Development Year with substantial funding behind it signals policy clarity.
The disability threshold change, from 80% to 60% eligibility, is administratively simple yet socially meaningful. It significantly expands the safety net at modest fiscal cost.
Fish-farming deregulation may receive little attention, yet removing land-use approval requirements could unlock livelihoods across coastal Gujarat without additional public spending.
Where the Budget Falls Short
The education paradox is difficult to ignore. While allocation has risen sharply, the Gujarat Socio-Economic Review 2023-24notes that primary schools declined from 45,315 in 2019-20 to 44,288 in 2023-24. Spending is rising while the government school footprint shrinks. Infrastructure is being upgraded; foundational learning outcomes remain less visible in policy discourse.
Healthcare receives no major headline initiative in this budget. In a state with a GSDP approaching Rs.30 lakh crore, the absence of a large public-health expansion programme new medical colleges, district hospital upgrades or large-scale PHC modernisation is notable.
Agriculture continues to rely on traditional tools: subsidies, irrigation and mechanisation. Climate adaptation for water-stressed regions receives limited strategic emphasis.
Employment remains addressed indirectly through industry and education spending. There is no formal employment measurement framework or commitment to regular public reporting despite concerns about wage growth and informal sector conditions.
Fiscal Signals Worth Watching
The revenue surplus has eased from 0.8% to 0.7% of GSDP, as per the FRBM statement. The primary deficit has expanded to Rs.27,197 crore, and net borrowings stand at Rs.55,905 crore. This does not signal fiscal stress but it indicates a direction worth monitoring.
The Larger Verdict
Gujarat’s GSDP is projected at Rs.29.82 lakh crore for 2025-26 with growth around 12%, and per capita income at Rs.3.36 lakh, according to the state’s Economic Review. These are strong foundations.
This is a dhruv (steadfast) budget fiscally disciplined, infrastructure-focused and largely free of populist excess. Yet a good budget asks: Can we afford this? A great budget asks: Can we afford not to?
On education quality, public health ambition, employment transparency and rural transformation, the budget still asks the first question. Gujarat arguably has the capacity to ask the second.
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