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Gujarat Economy Booms: 11.4% Growth Projected for FY27
18 Feb
Summary
- Gujarat's economy set to grow 11.4% in FY27, reaching ₹33.24 lakh crore.
- Manufacturing share rises to 32.8% while agriculture falls to 14.2%.
- Capital expenditure surges 25.94% year-on-year to boost infrastructure.
Gujarat's economy is poised for significant expansion, with a projected growth rate of 11.4% in FY27. This robust performance is expected to elevate the state's Gross State Domestic Product (GSDP) to ₹33.24 lakh crore. The economic structure continues to evolve, marked by a rising contribution from manufacturing, which now accounts for 32.8% of the GSDP, up from 28.4% in FY12. Conversely, the agriculture sector's share has declined to 14.2% in FY25 from 17.8% in FY12.
Public expenditure patterns reveal a strategic focus on infrastructure, with capital expenditure (capex) set to increase by 25.94% year-on-year, reaching ₹1,23,554 crore in FY26 (RE) and budgeted at ₹1,57,359 crore for FY27. This sustained infrastructure push is accompanied by disciplined fiscal management, as total expenditure growth has remained lower than GSDP growth. State taxes are expected to grow healthily, with VAT/GST being the primary revenue source, contributing 68.53% in FY26 (RE).
The state's public debt is projected to increase to ₹4.87 lakh crore in FY27, with debt servicing costs declining. The average cost of debt has fallen significantly since FY12, improving the state's borrowing profile. Fiscal deficits are expected to remain below 2% of GSDP for FY25, FY26 (RE), and FY27, indicating a continued commitment to fiscal consolidation despite rising absolute debt levels.
