MP Sets Benchmark in Fiscal Planning With Three-Year Rolling Budget

A major fiscal and governance innovation Madhya Pradesh is set to become the first state in India to prepare a three-year rolling budget. Deputy Chief Minister and Finance Minister Jagdish Devda announced that the state budget starting 2026-27 will include indicative estimates for the next two financial years. Which will marking a shift towards long-term, adaptive budget planning.

Background

• Traditionally state budgets in India are prepared on an annual basis, focusing largely on short-term revenue and expenditure projections.
• However, evolving economic challenges, infrastructure needs, and development priorities have highlighted the need for medium-term fiscal planning.
• Against this backdrop Madhya Pradesh has introduced the concept of a rolling budget, which allows periodic review and adjustment based on actual performance and changing conditions.

What Is a Rolling Budget?

A rolling budget differs from a conventional static budget in several ways. Instead of being fixed for a single year, it is continuously updated, with future year estimates revised annually.

This approach improves planning, monitoring, forecasting, and fiscal discipline, making budgeting more responsive and realistic.

Under this model, Madhya Pradesh will prepare,

• Detailed budget estimates for 2026–27, and
• Indicative projections for 2027–28 and 2028–29

This makes the budget a dynamic policy tool rather than a one-time financial statement.

Public Participation in Budget Making

• A key feature of the upcoming budget process is greater public involvement.
• To make the budget more inclusive and result-oriented, the state government organized a Budget Dialogue Programme, bringing together economists, budget experts, intellectuals, and domain specialists.
• According to the Deputy CM, the objective is to ensure that the budget reflects the aspirations of citizens, not just numerical targets.
• Suggestions received during these consultations will be actively considered during policy formulation, reinforcing the democratic spirit of governance.

Significance of the Initiative

• This move is significant for several reasons.
• It introduces medium-term fiscal visibility, improves transparency, and allows better evaluation of policy outcomes.
• It also positions Madhya Pradesh as a pioneer in budgetary reforms among Indian states, potentially serving as a model for others.

Key Takeaways

• Madhya Pradesh will prepare India’s first three-year rolling budget starting 2026- 27.
• Indicative estimates will also be prepared for 2027-28 and 2028-29.
• The initiative was announced by Deputy CM & Finance Minister Jagdish Devda.
• Rolling budgets allow periodic revision based on performance and changing conditions.
• Strong emphasis on public participation through Budget Dialogue Programmes.
• State capital expenditure has reached a record ₹82,513 crore, supporting long-term growth.

Question

Q. Which Indian state will become the first to prepare a three-year rolling budget from 2026–27?

A. Gujarat
B. Madhya Pradesh
C. Karnataka
D. Maharashtra