Considering the overall growth potential of Gujarat, the Planning Commission had set a target growth rate of 10.2% for Gujarat in the 10th five year plan compared to the average of 8.2% for the entire country; and true to this spirit of economic buoyancy, Gujarat achieved a growth rate of 15% in the first year itself and surpassed the target of 10.2% set by the planning commission. In fact, Gujarat has been growing at 10-11% for the past several years and is all set to take on the challenges of the next five-year plan target.

What is more important is that the growth is coupled with financial discipline. Soon after he became the Chief Minister, Modi focused on curtailing government expenditure and emphasized on the recovery of government dues. The sales tax income which was Rs.5,890 crores when he took over increased to Rs.10,606 crores within 4 years, more importantly without imposing any new taxes. Since the last 3 years, development expenditure is more than the non-development expenditure in Gujarat, which is an unusual phenomenon.

On account of the abundant availability of gas and with a view to proliferate its usage both by industry and household, he reduced the sales tax on gas from 20% to 12%. His fiscal prudence has enabled the turning around of 'PSU’s (Public Sector Units) such as GSFC, GMDC, GIPCL, GNFC, GACL and resulted in enhancing their market capitalization to an all time high. Another prudent step was a major restructuring drive turning around the power sector from a loss of over Rs.1900 crores in 2003-04 to a profit of Rs.180 crores in 2005-06.

He also addressed certain basic issues plaguing the economy and brought about financial discipline. He has demonstrated adequate courage to hike the electricity tariff in certain sectors, checking power theft, not succumbing to the demand for undue subsidies, cancellation of fake ration cards etc. At the same time, his decisive reforms such as rationalization of taxes, system for improving cash collections for power sector and the like have improved the economic health of the state.

Over the last few years, the Government of Gujarat has also succeeded in completely wiping off the revenue deficit from the level of Rs. 7,000 crores and is poised to be a revenue surplus state. The fiscal deficits have also decreased substantially.