The Gujarat government has unveiled a Rs 3,70,250 crore budget for the fiscal year 2025-26, marking an 11.37% increase from the previous year. Finance Minister Kanubhai Desai presented the budget in the Gujarat Assembly, emphasising the government’s commitment to economic growth, infrastructure development, and social welfare.

A major highlight of the budget is the establishment of the Viksit Gujarat Fund, with an allocation of Rs 50,000 crore over the next five years. This initiative aims to fulfil the state’s vision of achieving developed status by 2047. For the upcoming fiscal year, Rs 5,000 crore has been earmarked for this fund.

The budget maintains a surplus and does not introduce any new taxes. Instead, it provides tax relief amounting to Rs 148 crore, including a 5% reduction in motor vehicle tax on fully battery-operated electric vehicles. This move is expected to promote eco-friendly transportation in the state.

Key Allocations and Sectoral Boosts

Urban Development

With urban expansion being a priority, the budget sees a 40% increase in allocation for urban development, amounting to Rs 30,325 crore. The state government has declared 2025-26 as the ‘Urban Development Year’ and allocated Rs 2,300 crore for projects across nine newly formed municipal corporations. Additionally, Rs 2,730 crore has been set aside for Ahmedabad and Surat Metro services and Rs 350 crore for the Riverfront project connecting Ahmedabad, GIFT City, and Gandhinagar.

Economic and Industrial Development

The Gujarat government is investing in the Surat Economic Region (SER) as part of its industrial expansion strategy. Identified as one of four national growth hubs by NITI Aayog, SER will support industries, tourism, and infrastructure across six districts. Furthermore, six new economic growth hubs are under development to ensure balanced economic progress.

A new Commissionerate of Services will be established to strengthen the service sector, and artificial intelligence (AI) adoption in governance will be a key focus. Rs 175 crore has been allocated for an AI Demonstrative Lab at LD Engineering College in Ahmedabad, along with AI labs in six government technical institutions.

Tourism and Transport Infrastructure

Tourism has been given a 31% budgetary boost. The government will establish District Tourism Development Societies and construct 150 roads to improve connectivity to key tourist destinations. Plans are also in place for a greenfield airport in Dahod and the expansion of airports in Porbandar, Bhavnagar, Surat, and Vadodara, with a total allocation of Rs 210 crore.

In transportation, Rs 1,020 crore has been earmarked for the development of high-speed corridors, including the Garvi Gujarat High-Speed Corridor Project, which will span 1,367 km across 12 routes. Additionally, two expressways—Namo Shakti Expressway (connecting Banaskantha to the coastal region) and Somnath-Dwarka Expressway (linking Ahmedabad to Rajkot with an extension to pilgrimage sites)—are planned.

Fisheries and Agriculture

The fisheries sector will benefit from regulatory reforms, including the removal of the requirement for non-agriculture approval for fish farming on agricultural land. The agriculture sector has been allocated Rs 22,948 crore, with Rs 800 crore set aside for farm mechanisation, particularly for tractor purchase assistance.

Social Welfare and Tribal Development

The state government has reaffirmed its commitment to tribal welfare through the Vanbandhu Kalyan Yojana-2, allocating Rs 30,121 crore for 2025-26. This fulfils a prior commitment of Rs 1 lakh crore over five years. The budget also includes Rs 3,140 crore for forest and environmental initiatives, with Rs 40 crore designated for a Command and Control Unit to enhance wildlife protection and prevent human-animal conflicts.

Tax Reforms and Administrative Measures

Significant tax relief measures include reduced stamp duty on specific release deeds, mortgage deeds, and lease agreements. The principal reduction in motor vehicle tax for electric vehicles is expected to amount to Rs 123 crore, while stamp duty reductions will account for Rs 25 crore.

Additionally, the government has announced the formation of the Gujarat Administrative Reforms Commission, to be chaired by retired IAS officer Hasmukh Adhia. The commission will focus on streamlining governance and improving public service delivery.

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Leadership Perspectives

Chief Minister Bhupendra Patel praised the budget, describing it as a holistic financial plan that ensures inclusive development. He emphasised the government’s focus on children’s nutrition, disability benefits, and social welfare, underscoring that “nobody is excluded” from its benefits.

Finance Minister Desai concluded by reiterating the state’s dedication to the vision of Viksit Bharat 2047 through the roadmap of Viksit Gujarat 2047, built on five pillars: Social Security, Human Resource Development, Infrastructure Development, Economic Growth, and Green Growth. The budget sets a strong foundation for Gujarat’s continued progress towards sustainable and inclusive development.

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