Gujarat Fiscal Discipline: FM Desai on Debt & Spending

Gandhinagar, Mar 23 (PTI) Gujarat Finance Minister Kanubhai Desai on Monday asserted that the state government is maintaining strict fiscal discipline and meeting all prescribed financial targets, even as it continues to increase capital expenditure for development.

Participating in the discussion on demands for the Finance Department in the assembly during the ongoing Budget session, Desai said the government is managing finances as per prescribed standards and traditions of good governance.

His remarks came in response to concerns raised by senior Congress MLA Shailesh Parmar over the state's financial management, including rising non-developmental expenditure and debt.

In his speech, Desai said the Gujarat Fiscal Responsibility Act, 2005 ensures fiscal stability and accountability, and the state aims to eliminate revenue deficit or maintain a surplus.

He informed the House that the state achieved a revenue surplus of Rs 18,943 crore in 2024-25, Rs 23,725 crore in 2025-26 (revised estimates), and has projected a surplus of Rs 25,587 crore for 2026-27.

Addressing fiscal deficit concerns, he said it is required to be within 3 per cent of GSDP, while Gujarat's fiscal deficit is estimated at 1.97 per cent for 2026-27.

On debt, the minister said the limit is 27.10 per cent of GSDP, whereas Gujarat's debt stood at 13.87 per cent in 2024-25, 14.43 per cent in 2025-26 (revised), and is estimated at 14.65 per cent in 2026-27.

"The state's debt is an important resource for development works and capital expenditure. The state has never defaulted on debt repayment. Due to the effective financial management, Gujarat has not taken a single overdraft for the last 22 financial years and has not taken a single advance for the last 21 years," he said.

The 2026-27 budget, pegged at Rs 4.08 lakh crore, has allocated Rs Rs 1,57,358 crore for capital expenditure, accounting for 39 per cent of total expenditure, compared to 25.1 per cent in 2021-22, Desai informed the House.

"This shows a significant increase and continuous progress towards asset creation. Capital expenditure has grown by an average of 28 per cent over the last five years," the minister said.

Earlier, Congress MLA Shailesh Parmar questioned the balance between developmental and non-developmental spending in the 2026-27 budget, stating that the allocations reflect a rising burden on the state's finances.


Gujarat's per capita income has been pegged at Rs 3,01,000, Parmar said while describing the budget as having "two sides like a coin", namely developmental and non-developmental expenditure.

"Rs 2,62,477.41 crore has been allocated towards developmental expenditure, translating to Rs 40,381 per capita for the state's 6.5 crore population. The other side of the coin is non-developmental expenditure, which is Rs 1,39,998.93 crore. This means there has been an increase in non-developmental expenditure this time," Parmar said.

He pointed out that while developmental expenditure for 2026-27 has increased by Rs 26,144 crore compared to 2025-26, non-developmental expenditure has also risen by Rs 25,185.84 crore during the same period.

"If we look at these figures every year, it seems clear that in the next one or two years, both figures will equalise," the Congress MLA said.

Raising concerns over the state's debt, Parmar said it stood at Rs 3,99,363 crore for 2024-25, adding that the government increased debt by Rs 1,094.88 crore every day on average.

He further said Rs 28,024.73 crore was paid as interest in 2024-25, amounting to Rs 71.8 crore daily, while Rs 29,086 crore was paid towards the principal.

"Thus, Rs 40,381 is spent per Gujarati on developmental expenditure, while the debt burden per Gujarati is around Rs 61,482," he said.

In his address, Desai said that when GST was implemented in June 2017, the number of taxpayers in the state was 5,08,863, which has increased to 13,82,342 now.

"The number of taxpayers in the state has increased by more than 172 per cent. Gujarat has been ranked first at the national level for five consecutive years in filing GST returns within the stipulated time limit," Desai said.

In addition, Desai said Gujarat has seen a 13 percent increase in GST revenue this year.

From April-2025 to February-2026, the state government has received a total revenue of Rs 1,15,421 crore including GST, VAT, electricity duty and professional tax, he said.