A New Direction in State Budgeting
MP Sets Benchmark in Fiscal Planning With Three-Year Rolling Budget: Madhya Pradesh is set to become the first Indian state to introduce a three-year rolling budget starting from the 2026–27 financial year. The announcement was made by Deputy Chief Minister and Finance Minister Jagdish Devda, marking a major shift in India’s state-level fiscal planning framework.
Unlike traditional budgets, this approach extends planning beyond a single financial year. It signals a move towards predictable, adaptive, and growth-oriented budgeting, aligned with long-term development priorities.
Understanding the Rolling Budget Framework
A rolling budget is not static. It is revised periodically to reflect changing economic conditions, policy outcomes, and fiscal realities. Each year, the budget rolls forward by adding another year to the planning horizon.
Under this model, Madhya Pradesh will prepare detailed estimates for 2026–27 along with indicative projections for 2027–28 and 2028–29. This makes the budget a continuous planning instrument rather than a one-time annual exercise.
Static GK fact: In India, Article 202 of the Constitution mandates annual state budgets, but does not restrict states from adopting multi-year fiscal frameworks.
Why Annual Budgets Are No Longer Enough
Traditional annual budgeting focuses largely on short-term revenue and expenditure balancing. However, rising infrastructure needs, social sector commitments, and economic volatility demand medium-term fiscal visibility.
A rolling budget helps governments anticipate expenditure pressures and align resources with long-term policy goals. It also strengthens fiscal discipline by linking yearly allocations to medium-term outcomes.
Static GK Tip: Medium-term budgeting frameworks are commonly used in countries like the UK and Australia to improve expenditure efficiency.
Public Participation as a Core Feature
One of the most distinctive elements of this initiative is the emphasis on public participation. The state government conducted a Budget Dialogue Programme, engaging economists, financial experts, intellectuals, and sector specialists.
According to the Deputy CM, the aim is to ensure that budget priorities reflect citizens’ aspirations, not just departmental demands. Inputs from these consultations will be considered during final budget formulation.
This participatory approach enhances democratic accountability and improves the quality of fiscal decision-making.
Impact on Capital Expenditure and Growth
Madhya Pradesh has significantly increased its capital expenditure, which now stands at a record ₹82,513 crore. Higher capital spending supports infrastructure creation, employment generation, and long-term economic growth.
A rolling budget allows such investments to be planned across multiple years, reducing project delays and cost overruns. It also improves coordination between departments and funding agencies.
Static GK fact: Capital expenditure creates durable assets, unlike revenue expenditure, which covers salaries, subsidies, and operational costs.
Why This Reform Matters Nationally
This move positions Madhya Pradesh as a pioneer in state-level fiscal reforms. The model improves transparency, enables better policy evaluation, and enhances investor confidence through fiscal predictability.
If successful, the initiative could influence other states to adopt similar medium-term budgeting practices, strengthening India’s overall fiscal governance framework.
Static Usthadian Current Affairs Table
MP Sets Benchmark in Fiscal Planning With Three-Year Rolling Budget:
| Topic | Detail |
| State | Madhya Pradesh |
| Budget Reform | Introduction of three-year rolling budget |
| Starting Year | 2026–27 |
| Future Projections | 2027–28 and 2028–29 |
| Announced By | Deputy CM and Finance Minister Jagdish Devda |
| Public Participation | Budget Dialogue Programme |
| Capital Expenditure | ₹82,513 crore |
| Significance | First state in India to adopt rolling budget |
