Madhya Pradesh's Fiscal Ambition Meets Reality Check
The Madhya Pradesh government has set an ambitious fiscal target, declaring that the state budget size will surpass Rs 7.28 lakh crore by the year 2028. This goal involves a phased increase planned between 2024 and 2028, representing a significant expansion of financial resources and public spending.
Current Budget Performance Falls Short of Projections
However, recent data reveals a substantial gap between projections and actual performance. In the fiscal year 2026–27 itself, the budget reached only approximately Rs 4.38 lakh crore, falling considerably short of the trajectory needed to achieve the 2028 target. This discrepancy raises questions about the feasibility of the government's ambitious financial planning.
Devolution Cut Adds to Fiscal Pressure
The challenge is compounded by a reduction in central devolution—the share of taxes transferred from the central government to the state. The devolution rate was cut from 7.8 percent in 2025–26 to 7.3 percent for the next fiscal year, potentially straining state revenues further. This reduction could impact the government's ability to fund its budget expansion without alternative revenue sources.
Government's Confident Response to Challenges
Despite these hurdles, the state government remains confident. The chief minister has expressed strong resolve, stating, "With the chief minister's strong resolve, we will achieve the target. Every time the BJP government made a commitment, we fulfilled it. We will do so again." This assertion underscores the administration's determination to meet its fiscal goals despite current shortfalls.
Innovative Budgeting Approaches and Monetization Strategies
To bridge resource gaps and achieve targets, the government has implemented several innovative measures. Last year, a zero-based assessment of departmental schemes was rolled out to understand fund utilization and identify unspent amounts. Additionally, Madhya Pradesh has become the first state to present a rolling budget covering FY 2026-27, FY 2027–28, and FY 2028-29.
This forward-looking framework is designed to monitor implementation, identify development gaps, and guide future policy decisions. It enables long-term planning and promotes better outcome-based governance. The government is also exploring ways to monetize welfare schemes, though specific details on this strategy remain limited in the current discussion.
Focus on Infrastructure and Industry Within GYANII Framework
The budget places significant emphasis on infrastructure and industry, sectors deemed crucial for development. Adequate attention and financial support have been allocated to these areas. This approach is part of a broader GYANII-based budget framework, which includes:
- Garib (Poor)
- Yuva (Youth)
- Annadata (Farmers)
- Nari (Women)
- Industries
- Infrastructure
This framework aims to ensure balanced and inclusive growth across all priority segments, reflecting a holistic approach to economic planning.
Opposition Criticism and Government Rebuttal
The opposition has raised concerns about rising debt and what they describe as an empty treasury. In response, a government representative stated, "I believe the Opposition neither listened to the budget nor examined the data. Their approach is limited to criticism. They created noise in the House without showing any real interest in going over the budgetary provisions." This rebuttal highlights the political tensions surrounding the budget's implementation and fiscal health.
Substantial Allocation for Farmers' Welfare Year
In line with the declaration of 2026 as the Farmers' Welfare Year, the budget includes significant provisions for agricultural support. Proposals are structured around farmer prosperity and ensuring fair prices for produce. A total allocation of Rs 1,15,013 crore has been made for agriculture and allied priorities, aiming to strengthen rural income and stability.
Core Idea: A People's Budget for Inclusive Growth
The core idea behind this year's budget is to create a "people's budget meant for every section of society." To understand public expectations, the government invited suggestions from citizens and sector experts, incorporating them into the final proposal. Described as a sarvsparshi (all-encompassing) budget, it seeks to address the interests of all demographic groups, emphasizing inclusivity and responsiveness to public needs.
As Madhya Pradesh navigates these fiscal challenges, the government's strategies—from innovative budgeting to targeted allocations—will be critical in determining whether the ambitious Rs 7.28 lakh crore target by 2028 can be realistically achieved amidst revenue constraints and political scrutiny.
