Gujarat Finance Minister Kanu Desai. (Photo: Twitter/ KanuDesai)
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Gujarat to grow at 15.5% in 2022-23 fiscal; GSDP to double in next 5 yrs
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Gujarat is poised to grow at 15.5 per cent during the current fiscal 2022-23 and has targeted to almost double its Gross State Domestic Product (GSDP) to Rs 42 lakh crore in the next five years, states data tabled in the state legislature along with the annual budget for financial year 2023-24.
The state economy at current prices has recorded an annualised growth rate of 12.56 per cent for the last 12 years since 2011-12 and budget documents tabled in the Gujarat Assembly on Friday show that the GSDP of the state will grow to Rs 22.61 lakh crore by 2022-23 clocking a growth of 15.5 per cent.
This growth rate in the current fiscal is tad lower than the 19.6 per cent growth clocked post-Covid, during 2021-22.
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“In the next five years, the Gujarat government has targeted to increase its GSDP to Rs 42 lakh crore and more than double it to Rs 83 lakh crore in next 10 years,” Mona Khandhar, Principal Secretary (Economic Affairs), Finance department said after the budget presentation ended in the legislature.
“Currently, Gujarat contributes 8.36 per cent to the country’s GDP. The government aims to take the share of Gujarat in the country’s GDP to 10 percent or more,” she added.
According to J P Gupta, Principal Secretary, finance department, Gujarat will be borrowing Rs 30,000-35,000 crore during 2023-24 and this will push the public debt to Rs 3.81 lakh crore. The public debt stood at 15.02 per cent of GSDP for 2023-24 which is an improvement from 15.75 per cent in 2022-23. The public debt in 2022-23 stood at Rs 3.39 lakh crore and it is projected to rise to Rs 4.8 lakh crore by 2025-26.
Though the fiscal deficit of Gujarat remained below the prescribed three per cent of GSDP, the projected deficit for the year 2023-24 stood at 1.75 percent which is slightly higher than the 1.64 percent in 2022-23.
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The state taxes have registered a CAGR of 10.5 per cent during the period 2011-12 to 2022-23.
State’s own tax revenue — Value Added Tax and Goods and Services Tax — are the highest contributors, accounting for 76 per cent of the total own tax revenue in 2022-23.
Both these taxes have seen an annualised growth rate of 11.31 percent between 2011-12 to 2022-23. Land Revenues too have grown at an annualised growth rate of 8.44 percent during this 12 year period.
As an expert in economic analysis and fiscal matters, it's crucial to delve into the comprehensive details provided in the article about Gujarat's economic trajectory and the budgetary projections for the fiscal year 2023-24. My expertise in this field stems from an in-depth understanding of economic indicators, fiscal policies, and regional economic dynamics.
Firstly, the growth projection for Gujarat in the fiscal year 2022-23 stands at an impressive 15.5%, showcasing the state's robust economic performance. The Gross State Domestic Product (GSDP) is expected to reach Rs 22.61 lakh crore during this period, indicating a remarkable annualized growth rate of 12.56% over the last 12 years since 2011-12.
The article emphasizes the state's ambitious target to nearly double its GSDP to Rs 42 lakh crore within the next five years, with a long-term goal of reaching Rs 83 lakh crore in the subsequent decade. This ambitious plan, as articulated by Mona Khandhar, Principal Secretary (Economic Affairs) of the Finance department, demonstrates Gujarat's commitment to sustained economic expansion.
Furthermore, the article provides insights into the fiscal strategies employed by the Gujarat government. The state plans to borrow between Rs 30,000-35,000 crore in the fiscal year 2023-24, contributing to a projected public debt of Rs 3.81 lakh crore, an improvement from the previous year. The state's fiscal deficit, though below the prescribed three percent of GSDP, is expected to slightly increase to 1.75 percent in 2023-24.
Understanding the nuances of the state's revenue sources is crucial. Gujarat's tax revenues, with a Compound Annual Growth Rate (CAGR) of 10.5% from 2011-12 to 2022-23, are primarily derived from Value Added Tax (VAT) and Goods and Services Tax (GST), constituting 76% of the total own tax revenue in 2022-23. These taxes have shown a robust annualized growth rate of 11.31% over the last 12 years. Additionally, land revenues have grown at an annualized rate of 8.44% during the same period.
In conclusion, Gujarat's economic trajectory, as outlined in the provided article, reflects a strategic approach towards sustainable growth, backed by meticulous fiscal planning and revenue diversification. The state's focus on increasing its contribution to the country's GDP and managing its fiscal parameters showcases a comprehensive and forward-looking economic vision.
