Madhya Pradesh to Become First State with Zero-Based and Three-Year Rolling Budget

Under the leadership of Chief Minister Dr. Mohan Yadav, Madhya Pradesh is progressing rapidly towards industrialization and comprehensive development. The government’s focus goes beyond economic growth to include employment generation, infrastructure development, and social justice.

In line with this, the state government has set a goal to double the budget over the next five years to accelerate investments and welfare schemes. To ensure fiscal discipline amid this expansion, the government is introducing two innovative approaches: Zero-Based Budgeting (ZBB) and a Three-Year Rolling Budget System.

Deputy Chief Minister and Finance Minister Shri Jagdish Devda said that this initiative will lay a strong foundation for realizing the vision of “Developed Madhya Pradesh 2047” and serve as a model for other Indian states.

He added, “Zero-Based Budgeting and Rolling Budgeting will allow better evaluation of plans and ensure that every expenditure is directly aligned with the needs of the people and state priorities.”

What is Zero-Based Budgeting (ZBB)?

ZBB is a method where every financial year starts from a 'zero' base. Departments must justify each budget item as essential, rather than relying on past year’s expenses as the base. This method focuses on real needs and helps eliminate unnecessary spending while increasing transparency.

What is a Three-Year Rolling Budget?

A rolling budget is a dynamic financial tool that provides forecasts for three years ahead, updated annually. For example, if the current year is 2025–26, then the budget will include projections for 2025–26, 2026–27, and 2027–28. The next year, 2028–29 will be added, and the previous year removed.

This approach promotes continuity in policy and long-term planning of schemes and infrastructure.

Why This Reform Matters

Until now, most states followed traditional budgeting methods based on past expenditures. In contrast, ZBB requires each scheme to prove its utility from scratch, making ineffective schemes naturally redundant and optimizing resource allocation.

Internationally, countries like the United States and the United Kingdom have adopted similar practices, enhancing governance and financial discipline.