Madhya Pradesh to Adopt New Budgeting System for Holistic Development
Madhya Pradesh, under the leadership of Chief Minister Dr. Mohan Yadav, is advancing swiftly towards greater industrial growth and holistic development. The state government’s focus is not only on - 02/09/2025
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Madhya Pradesh, under the leadership of Chief Minister Dr. Mohan Yadav, is advancing swiftly towards greater industrial growth and holistic development. The state government’s focus is not only on economic growth but also on employment generation, infrastructure development and social justice. In line with this vision, the government has set a target to double the state budget over the next five years, ensuring greater investment and acceleration of welfare schemes across all sectors. Alongside this expansion, strict financial discipline will also be enforced.
As part of this strategy, the state has decided to implement a Zero-Based Budgeting (ZBB) system and a Three-Year Rolling Budget, ensuring financial discipline and sustainable long-term growth. Deputy Chief Minister and Finance Minister Shri Jagdish Deora said that this initiative will lay a strong foundation for the vision of ‘Viksit Madhya Pradesh 2047’ and serve as a model for other states.
Through Zero-Based Budgeting and Rolling Budgeting, every scheme will undergo rigorous evaluation. Each expenditure will be directly linked to public needs and state priorities. Dy. CM Shri Deora said, “This will provide the strongest base for achieving the goal of a Developed India and a Developed Madhya Pradesh by 2047”.
The Initiative Matters for Financial Discipline
Traditionally, most states follow conventional budgeting, where allocations are based on previous expenditures. In contrast, Zero-Based Budgeting requires every scheme to justify its relevance from scratch, ensuring ineffective schemes are phased out and resources are utilised optimally.
Internationally, countries such as the United States and the United Kingdom have adopted this system to strengthen good governance and ensure financial discipline. With this step, Madhya Pradesh has become the first state in India to introduce such reforms, setting a model for others to follow.
Rolling Budget for Forward-Looking Planning
Under the Rolling Budget system, budgets will be prepared for Years 2026–27, 2027–28 and 2028–29, with annual reviews and adjustments. This ensures policies remain forward-looking and long-term, free from short-term pressures. Experts note that this model has already been successful in the corporate sector, and adopting it in state governance reflects strong policy foresight.
Financial Discipline and Social Justice
The Finance Department has clarified that at least 16% of the budget will be earmarked for the Scheduled Caste Sub-Plan and 23% for the Scheduled Tribe Sub-Plan. New guidelines will ensure transparency in salary, pension and allowance calculations. Additionally, off-budget expenditures and the financial impact of centrally sponsored schemes will now be incorporated into the state budget. This will enhance transparency while ensuring fiscal discipline and public welfare.
National Perspective
While most states continue to rely on traditional budgeting systems, Madhya Pradesh’s decision is seen as a game-changer in financial reforms. Experts believe that, if successful, this model could inspire the Union Government and other states to adopt similar practices.
