The Finance Minister of Gujarat, Mr Kanubhai Desai, presented the Budget for the state for the financial year 2024-25 on February 2, 2024.

Budget Highlights

  • The Gross State Domestic Product (GSDP) of Gujarat for 2024-25 (at current prices) is projected to be Rs 27.9 lakh crore, amounting to growth of 13.3% over the revised estimates for 2023-24.

  • Expenditure (excluding debt repayment) in 2024-25 is estimated to be Rs 2,99,362 crore, an increase of 16% over the revised estimates of 2023-24.  In addition, debt of Rs 29,085 crore will be repaid by the state.

  • Receipts (excluding borrowings) for 2024-25 are estimated to be Rs 2,47,445 crore, an increase of 15% as compared to the revised estimate of 2023-24.

  • Revenue surplus in 2024-25 is estimated to be 0.4% of GSDP (Rs 9,821 crore), lower than the revised estimates for 2023-24 (0.8% of GSDP).  In 2023-24, the revenue surplus is expected to be higher than the budget estimate (0.4% of GSDP).

  • Fiscal deficit for 2024-25 is targeted at 1.9% of GSDP (Rs 51,917 crore).   In 2023-24, as per the revised estimates, fiscal deficit is expected to be 1.7% of GSDP, lower than the budget estimate (1.8% of GSDP).

Policy Highlights

  • Namo Laxmi Scheme:  The government will provide scholarships to girls studying in secondary and higher secondary schools.  Every girl student will get a total assistance of Rs 50,000 over four years.

  • Namo Saraswati Scheme:  Financial assistance of Rs 25,000 will be provided to students from low and middle income households enrolling in the science stream in classes 11 and 12.

  • Namo Shri Scheme:  Pregnant women belonging to specified categories (such as SC, ST, and BPL) will be provided a one-time financial assistance of Rs 12,000.

  • Anganwadi 2.0 Scheme:  Under this scheme, 8,000 new anganwadis will be built, and 20,000 anganwadis will be provided with IT connectivity.  The outlay for the scheme is approximately Rs 1,800 crore.

  • Suposhit Gujarat Mission:  It will provide for adequate nutrition to children, adolescent girls, and women.  It will enhance the number of beneficiaries as well as assistance under various existing schemes, and new schemes will be launched whenever required.

  • Nirmal Gujarat Abhiyan 2.0:  Arrangements will be put in place for collection, segregation, and suitable disposal of dry and wet waste.

Gujarat’s Economy

  • GSDP:  In 2022-23, Gujarat’s GSDP (at constant prices) is estimated to grow at 8%.  Gujarat’s GSDP is estimated to grow at a faster rate than the national GDP in 2022-23 (7.2%).

  • Sectors:  The services sector recorded a faster growth in 2022-23 (8.5%) as compared to the agriculture and manufacturing, which grew at 4.6% and 3.4%, respectively.

  • In 2022-23, agriculture, manufacturing, and services sectors are estimated to contribute 20%, 45%, and 35% to the economy, respectively (at current prices).

  • Per capita GSDP:  The per capita GSDP in 2022-23 (at current prices) is estimated at Rs 3,13,512, an increase of 14% over 2021-22.

Figure  1 : Growth in GSDP and sectors in Gujarat at constant prices (2011-12)

image

Note: Agriculture also includes mining and quarrying; manufacturing also includes construction, and electricity, gas, water, and other utility services.  These numbers are as per constant prices (2011-12) which implies that the growth rate is adjusted for inflation.
Sources: Gujarat Socio Economic Review 2023-24; PRS.

Budget Estimates for 2024-25

  • Total expenditure (excluding debt repayment) in 2024-25 is targeted at Rs 2,99,362 crore.  This is an increase of 16% over the revised estimate of 2023-24.  This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 2,47,445 crore and net borrowings of Rs 48,415 crore.  Total receipts for 2024-25 (other than borrowings) are expected to register an increase of 15% over the revised estimate of 2023-24.

  • Revenue surplus in 2024-25 is estimated to be 0.4% of GSDP (Rs 9,821 crore), lower than the revised estimates for 2023-24 (0.8% of GSDP).  In 2023-24, revenue surplus is estimated to be significantly higher than budget estimate (0.4% of GSDP).  This is owing to 4% higher revenue receipts estimated at the revised stage as compared to budget stage, whereas revenue expenditure is estimated to be 1% lower than budgeted.

  • Fiscal deficit for 2024-25 is targeted at 1.9% of GSDP (Rs 51,917 crore), higher than the revised estimates for 2023-24 (1.7% of GSDP).  Fiscal deficit estimates for both 2023-24 and 2024-25 are well within the limit of 3.5% of GSDP permitted by the central government (of which 0.5% of GSDP will be made available only upon undertaking certain power sector reforms).

Table  1 : Budget 2024-25 - Key figures (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Total Expenditure

2,38,667

2,96,574

2,84,694

-4.0%

3,28,447

15.4%

(-) Repayment of debt

22,159

26,304

26,151

-0.6%

29,085

11.2%

Net Expenditure (E)

2,16,508

2,70,270

2,58,543

-4.3%

2,99,362

15.8%

Total Receipts

2,51,995

2,93,341

2,81,697

-4.0%

3,24,945

15.4%

(-) Borrowings

52,333

68,001

65,634

-3.5%

77,500

18.1%

Net Receipts (R)

1,99,662

2,25,340

2,16,063

-4.1%

2,47,445

14.5%

Fiscal Deficit (E-R)

16,845

44,930

42,480

-5.5%

51,917

22.2%

as % of GSDP

0.8%

1.8%

1.7%

 

1.9%

 

Revenue Surplus

19,865

9,038

18,618

106.0%

9,821

-47.2%

as % of GSDP

0.9%

0.4%

0.8%

 

0.4%

 

Primary Deficit

-8,508

16,310

14,690

-9.9%

21,963

49.5%

as % of GSDP

-0.4%

0.6%

0.6%

 

0.8%

 

GSDP

22,30,609

25,62,975

24,64,300

-3.9%

27,92,545

13.3%

Note:  BE is Budget Estimates; RE is Revised Estimates.
Sources:  Annual Financial Statement and Budget in Brief, Gujarat Budget 2024-25; PRS.

Expenditure in 2024-25

  • Revenue expenditure for 2024-25 is estimated to be Rs 2,19,832 crore, an increase of 11% over the revised estimate of 2023-24.  This includes the expenditure on salaries, pensions, interest, grants, and subsidies.
  • Capital outlay for 2024-25 is proposed to be Rs 75,689 crore, an increase of 29% over the revised estimate of 2023-24.  Capital outlay indicates the expenditure towards creation of assets.   As per revised estimates, capital outlay in 2023-24 is estimated to be 16% lower than the budget estimates.  Key sectors where capital outlay is estimated to be lower than budgeted in 2023-24 are: (i) Energy (by Rs 3,115 crore), (ii) Irrigation and Flood Control (by Rs 2,241 crore) and (iii) Roads and Bridges (by Rs 2,070 crore).

Allocation towards subsidies

In 2024-25, Rs 31,330 crore is estimated to be spent on subsidies.  This is an increase of 12% over the revised estimates for 2023-24 (Rs 28,003 crore).  Rs 12,207 crore has been allocated towards power subsidy for agriculture (39% of the total subsidies for 2024-25).  Other major subsidies include: (i) development of the textile industry (Rs 1,600 crore), , (ii) subsidies to the Gujarat State Road Transport Corporation (Rs 1,155 crore), and (iii) assistance to large industries (Rs 1,145 crore)

     

Table  2 :  Expenditure budget 2024-25 (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Revenue Expenditure

1,79,543

1,98,672

1,97,175

-1%

2,19,832

11%

Capital Outlay

35,499

70,101

58,696

-16%

75,689

29%

Loans given by the state

1,466

1,497

2,672

78%

3,842

44%

Net Expenditure

2,16,508

2,70,270

2,58,543

-4%

2,99,362

16%

Sources:  Annual Financial Statement, Gujarat Budget 2024-25; PRS.

Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of salaries, pensions, and interest.  A larger proportion of the budget being allocated for committed expenditure items limits the state’s flexibility to decide on other developmental expenditure priorities such as capital outlay.  In 2024-25, Gujarat is estimated to spend Rs 1,05,357 crore on committed expenditure, which is 46% of its estimated revenue receipts.  This comprises spending on salaries (21% of revenue receipts), pension (12%), and interest payments (13%).  In 2023-24, expenditure towards pensions is estimated to be 17% higher than the budget estimate.

Table  3 : Committed Expenditure in 2024-25 (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Salaries

41,557

45,094

44,528

-1%

48,980

10%

Interest payment

25,354

28,620

27,790

-3%

29,954

8%

Pension

22,435

21,529

25,180

17%

26,424

5%

Total Committed Expenditure

89,346

95,242

97,497

2%

1,05,357

8%

Note:  Salary data for 2023-24 (BE) has been back calculated from the figure given as a percentage of revenue receipts.
Sources:  Annual Financial Statement and Statements under the Gujarat Fiscal Responsibility Act, 2005, Gujarat Budget 2024-25; PRS.

Sector-wise expenditure: The sectors listed below account for 62% of the total expenditure on sectors by the state in 2024-25.  A comparison of Gujarat’s expenditure on key sectors with that by other states is shown in Annexure 1.

Table  4 : Sector-wise expenditure under Gujarat Budget 2024-25 (in Rs crore)

Sector

2022-23

Actuals

2023-24 Budgeted

2023-24 Revised

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

Budget Provisions 
 2024-25

Education, Sports, Arts, and Culture

35,458

38,403

38,826

44,579

15%

Provision of Rs 3,000 crore has been made towards the Mission Schools of Excellence Scheme.  

Transport

13,172

20,990

18,911

22,692

20%

Rs 16,816 crore has been allocated towards capital outlay on roads and bridges.

Energy

16,218

20,823

15,476

20,267

31%

Rs 12,207 crore has been allocated towards power subsidies for agriculture.

Health and Family Welfare

13,401

15,141

16,809

19,348

15%

Rs 2,191 crore has been allocated towards the Aarogya Suraksha Yojana.

Urban Development

12,652

17,710

18,394

18,634

1%

Rs 8,864 crore has been allocated towards the Swarnim Jayanti Mukhya Mantri Shaheri Vikas Yojana.

Irrigation and Flood Control

7,802

15,401

12,991

17,438

34%

Rs 5,609 crore has been allocated towards capital outlay on medium irrigation, and Rs 2,493 crore towards capital outlay on minor irrigation.

Agriculture and Allied Activities

7,786

11,643

10,882

11,857

9%

Rs 1,140 crore has been allocated towards financial assistance to farmers for interest subvention.

Social Welfare and Nutrition

9,613

10,413

12,106

11,358

-6%

Provision of Rs 2,865 crore has been made towards the Special Nutrition Programme.

Police

6,421

7,108

7,687

8,712

13%

Rs 7,127 crore has been allocated towards District Police.

Rural Development

8,230

7,721

7,535

8.555

14%

Rs 1,184 crore has been allocated towards grants to panchayats for creation of capital assets.

% of total expenditure on all sectors

61%

62%

62%

62%

 

 

Sources:  Annual Financial Statement, Gujarat Budget 2024-25; PRS.

Receipts in 2024-25

  • Total revenue receipts for 2024-25 are estimated to be Rs 2,29,653 crore, an increase of 6% over the revised estimate of 2023-24.  Of this, Rs 1,68,625 crore (73%) will be raised by the state through its own resources, and Rs 61,028 crore (27%) will come from the centre.  Resources from the centre will be in the form of state’s share in central taxes (18% of revenue receipts) and grants (8% of revenue receipts).

  • State’s own tax revenue:  Gujarat’s total own tax revenue is estimated to be Rs 1,48,950 crore in 2024-25, an increase of 11% over the revised estimate of 2023-24.  Own tax revenue as a percentage of GSDP is estimated at 5.3% in 2024-25, marginally lower than the revised estimates for 2023-24 (5.4%).  As per the actual figures for 2022-23, own tax revenue was 5.6% of GSDP.

  • Devolution:  In 2024-25, state’s share in central taxes is estimated at Rs 42,245 crore, a marginal increase of 1% over the revised estimate of 2023-24.

  • Grants from the centre in 2024-25 are estimated at Rs 18,783 crore, a decrease of 10% over the revised estimates of 2023-24.  This is mainly due to a decrease estimated in grants towards centrally sponsored schemes (Rs 12,802 crore) as compared to the revised estimates for 2023-24 (Rs 18,703 crore).  In 2023-24, grants from the centre are estimated to be 28% higher than the budget estimate, mainly on account of a higher grants estimated towards centrally sponsored schemes. 

Table  5 : Break-up of the state government’s receipts (in Rs crore)

Items

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 2023-24 to RE 2023-24

2024-25 Budgeted

% change from RE 2023-24 to BE 2024-25

State's Own Tax

1,24,810

1,38,848

1,34,076

-3%

1,48,950

11%

State's Own Non-Tax

18,434

17,013

19,262

13%

19,675

2%

Share in Central Taxes

33,034

35,559

41,649

17%

42,245

1%

Grants-in-aid from Centre

23,131

16,290

20,807

28%

18,783

-10%

Revenue Receipts

1,99,408

2,07,710

2,15,793

4%

2,29,653

6%

Non-Debt Capital Receipts

254

17,630

270

-98%

17,792

6495%

Net Receipts

1,99,662

2,25,340

2,16,063

-4.1%

2,47,445

15%

Note:  BE is Budget Estimates; RE is Revised Estimates. 
Sources:  Annual Financial Statement, Gujarat Budget 2024-25; PRS.

  • In 2024-25, State GST is estimated to be the largest source of own tax revenue (50% share).  State GST revenue is estimated to increase by 21% over the revised estimates of 2023-24.  However, in 2023-24, as per the revised estimates, revenue from SGST is expected to be 6% lower the budget estimates.
  • Land revenue in 2024-25 is estimated to register a decrease of 16% as compared to the revised estimates for 2023-24.  Although, in 2023-24, land revenue is estimated to be 131% higher than budgeted (an increase of Rs 3,736 crore).

Receipts from disinvestment

Gujarat has estimated that it will earn Rs 17,500 crore from disinvestments of public sector and other undertakings in 2024-25 (majority of non-debt capital receipts).  In 2023-24, the state had estimated to earn the same amount in the budget estimates, however, at the revised stage, no receipts are estimated from this source.  As per CAG (2023), 30 out of the 100 state PSUs reported losses in 2021-22.  It also observed that as of March 2022, accumulated losses of 22 PSUs were Rs 29,313 crore.

Table  6 :  Major sources of state’s own-tax revenue (in Rs crore)

Head

2022-23 Actuals

2023-24 Budgeted

2023-24 Revised

% change from BE 23-24 to RE 23-24

2024-25 Budgeted

% change from RE 23-24 to BE 24-25

State GST

52,154

66,030

61,815

-6%

74,597

21%

Sales Tax/ VAT

36,984

39,246

31,800

-19%

33,900

7%

Stamps Duty and Registration Fees

14,207

13,950

15,000

8%

16,000

7%

Taxes and Duties on Electricity

10,594

10,230

11,798

15%

11,754

-0.4%

Taxes on Vehicles

5,002

5,183

5,183

0%

5,600

8%

Land Revenue

4,481

2,860

6,596

131%

5,510

-16%

State Excise

188

155

180

16%

155

-14%

GST Compensation Grants

7,955

-

-

-

-

-

GST Compensation Loans

-

-

-

-

-

-

Sources: Annual Financial Statement and Receipt Budget, Gujarat Budget 2024-25; PRS.

Deficits and Debt Targets for 2024-25

The Gujarat Fiscal Responsibility Act, 2005 provides annual targets to progressively reduce the outstanding liabilities, revenue deficit, and fiscal deficit of the state government.

Revenue surplus:  It is the difference of revenue expenditure and revenue receipts.   A revenue surplus implies that the government need not borrow to finance those expenses which do not increase its assets or reduce its liabilities.  The budget estimates a revenue surplus of Rs 9,821 crore (0.4% of the GSDP) in 2024-25.

Fiscal deficit:  It is the excess of total expenditure over total receipts.  This gap is filled by borrowings by the government and leads to an increase in total liabilities.  In 2024-25, the fiscal deficit is estimated to be 1.9% of GSDP.   The fiscal deficit estimate for 2023-24 is well within the limit of 3.5% of GSDP permitted by the central government, of which 0.5% of GSDP will be available only upon carrying out certain power sector reforms.   The state government has projected that its fiscal deficit is likely to be higher in both 2025-26 (2.3% of GSDP) and 2026-27 (2.3% of GSDP). 

Outstanding Public Debt:  Outstanding public debt is the accumulation of total unpaid borrowings at the end of a financial year.  It does not include certain other liabilities such as liabilities towards public accounts.   At the end of 2024-25, the outstanding public debt is estimated to be 15.3% of GSDP, roughly same as the revised estimate for 2023-24.  The outstanding public debt rose in 2020-21 (COVID year), and has reduced thereafter.

Figure  2 : Revenue and Fiscal Balance (% of GSDP) 

image

Note: Positive (+) figures indicate a surplus, negative (-) figures indicate a deficit.  *Figures for 2025-26 and 2026-27 are projections; For 2020-21 and 2021-22, deficits reported without treating GST compensation loans as grants.  RE is Revised Estimates; BE is budget estimates.
Sources: Medium Term Fiscal Policy of various years, Gujarat Budget 2024-25; PRS. 

Figure  3 : Outstanding Public Debt (as % of GSDP) image

Note: *Figures for 2025-26 and 2026-27 are projections; RE is Revised Estimates; BE is budget estimates.
Sources: Medium Term Fiscal Policy of various years, Gujarat Budget 2024-25; PRS.

Outstanding Government Guarantees: Outstanding liabilities of states do not include a few other liabilities that are contingent in nature, which states may have to honour in certain cases.  State governments guarantee the borrowings of State Public Sector Enterprises (SPSEs) from financial institutions.  As of March 31, 2023, the state’s outstanding guarantee is estimated to be Rs 1,473 crore, which is 0.1% of GSDP in 2022-23.

Annexure 1:  Comparison of states’ expenditure on key sectors

The graphs below compare Gujarat’s expenditure in 2024-25 on six key sectors as a proportion of its total expenditure on all sectors.  The average for a sector indicates the average expenditure in that sector by 31 states (including Gujarat) as per their budget estimates of 2023-24. [1]

  • Education:  Gujarat has allocated 15.1% of its expenditure on education in 2024-25.  This is higher than the average allocation for education by states in 2023-24 (14.7%).

  • Health:  Gujarat has allocated 6.5% of its total expenditure towards health, which is higher than the average allocation for health by states (6.2%).

  • Rural development:  Gujarat has allocated 2.9% of its expenditure towards rural development.   This is significantly lower than the average allocation for rural development by states (5%).

  • Urban development:  Gujarat has allocated 6.3% of its expenditure towards urban development.   This is significantly higher than the average allocation towards urban development by states (3.4%).

  • Agriculture:  Gujarat has allocated 4% of its total expenditure towards agriculture, which is significantly lower than the average expenditure on agriculture by states (5.9%).

  • Energy:  Gujarat has allocated 6.9% of its total expenditure towards energy, which is significantly higher than the average allocation by states (4.7%).

image

image

image

image

image

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Note: 2022-23, 2023-24 (BE), 2023-24 (RE), and 2024-25 (BE) figures are for Gujarat.
Sources:  Annual Financial Statement, Gujarat Budget 2024-25; various state budgets; PRS.

[1]  The 31 states include the Union Territories of Delhi, Jammu and Kashmir, and Puducherry .

Annexure 2:  Comparison of 2022-23 Budget Estimates and Actuals

The following tables compare the actuals of 2022-23 with budget estimates for that year.

Table  7 : Overview of Receipts and Expenditure (in Rs crore)

Particular

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Net Receipts (1+2)

1,82,295

1,99,662

10%

1. Revenue Receipts (a+b+c+d)

1,82,045

1,99,408

10%

a. Own Tax Revenue

1,14,883

1,24,810

9%

b. Own Non-Tax Revenue

17,762

18,434

4%

c. Share in central taxes

28,418

33,034

16%

d. Grants-in-aid from the Centre

20,983

23,131

10%

     Of which GST compensation grants

5,000

7,955

59%

2. Non-Debt Capital Receipts

250

254

2%

3. Borrowings

51,001

52,333

3%

      Of which GST compensation loan

0

0

-

Net Expenditure (4+5+6)

2,18,408

2,16,508

-1%

4. Revenue Expenditure

1,81,040

1,79,543

-1%

5. Capital Outlay

35,898

35,499

-1%

6. Loans and Advances

1,470

1,466

0%

7. Debt Repayment

22,025

22,159

1%

Revenue Surplus

1,006

19,865

1875%

Revenue Surplus (as % of GSDP)

0.04%

0.9%

-

Fiscal Deficit

36,113

16,845

-53%

Fiscal Deficit (as % of GSDP)

1.4%

0.8%

-

Source:  Gujarat Budget Documents of various years; PRS.

Table  8 : Key Components of State's Own Tax Revenue

Tax source

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

State GST

52,692

52,154

-1%

Taxes on Vehicles

4,712

5,002

6%

Stamp Duty and Registration Fees

12,895

14,207

10%

Taxes and Duties on Electricity

9,153

10,594

16%

Sales Tax/ VAT

31,412

36,984

18%

State Excise

149

188

26%

Land Revenue

2,470

4,481

81%

Source:  Gujarat Budget Documents of various years; PRS.

Table  9 : Allocation towards Key Sectors

Sector

2022-23 BE

2022-23 Actuals

% change from BE to Actuals

Irrigation and Flood Control

9,109

7,802

-14%

Agriculture and Allied Activities

9,002

7,786

-14%

Welfare of SC, ST, OBC, and Minorities

5,422

5,053

-7%

Police

6,666

6,421

-4%

Urban Development

12,639

12,652

0%

Water Supply and Sanitation

6,159

6,315

3%

Housing

3,249

3,433

6%

Health and Family Welfare

12,207

13,401

10%

Social Welfare and Nutrition

8,414

9,613

14%

Rural Development

7,269

8,320

14%

Education, Sports, Arts, and Culture

30,537

35,458

16%

Energy

13,483

16,218

20%

Transport

10,908

13,172

21%

      of which Roads and Bridges

9,341

10,831

16%

Source:  Gujarat Budget Documents of various years; PRS.

 

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