The New Town of Gandhinagar was built in the 1960s as the capital of Gujarat state in western India with a spacious, modern character. Over the next four decades, it developed as an administrative center, but due to development restrictions and rigid periphery control, it was not able to effectively respond to regional growth pressures. The objective of Gandhinagar’s Development Plan for 2011 was to transform it from an administrative center into a thriving and economically vibrant community able to accommodate the demands of a rapidly urbanizing economy. This plan marked a departure from the state-led master planning and development based on eminent domain, and adopted a land readjustment mechanism for urban expansion. It applied a place-based approach to preserve the formal character of the capital city, while at the same time transform the quality of its built environment. This paper provides insights into the unique challenges of re-planning a planned New Town, and particularly highlights the opportunities that urban design scenarios provide to planners to meet a variety of planning objectives. A decade later, implementation success has been limited to urban expansion areas with the realization that the legacy of state-led development is not easily overcome without accompanying institutional changes.