Budgets shape economies, but who shapes budgets? Meghalaya’s experiment in participatory governance may hold the answer

By Bijoy A. Sangma

Budgets in India have long been top-down exercises, dictated by bureaucratic calculations rather than public aspirations. But in 2025, Meghalaya may have rewritten the rules of governance. With its latest Budget 2025-26, the state has pioneered a participatory approach, involving citizens, civil society, experts, and local leaders in shaping financial priorities.

This is perhaps the first time in India that a state has undertaken such an extensive consultative process in budget formulation, making it a true ‘People’s Budget.’ Unlike traditional financial blueprints crafted behind closed doors, Meghalaya’s budget was shaped by voices from the ground – farmers, entrepreneurs, academicians, and grassroots organizations. Over consultations, the government sought direct input from stakeholders, ensuring that financial allocations reflected real needs rather than abstract economic forecasts.

The significance of this experiment extends far beyond the hills of Meghalaya. As public trust in governance erodes across the country, could this be the model that brings fiscal decision-making closer to the people? If Meghalaya succeeds, will other states, and even the Union government, be compelled to rethink their approach to budget-making?

Mission 10: Meghalaya’s $10 Billion Bet
At the heart of this budget is ‘Meghalaya Mission 10’ – a bold initiative to double the state’s GDP to $10 billion by 2028. The government envisions a self-sustaining, high-growth economy with an annual expansion rate of 12.7 percent. It aims to drive this transformation through ten key sectors, including tourism, agriculture, IT, and entrepreneurship.

However, ambition alone does not guarantee success. The plan hinges on attracting ₹8,500 crore in private investment, a daunting task for a state that has yet to establish itself as a competitive investment destination. The success of this initiative will depend on whether Meghalaya can create a business-friendly climate, streamline bureaucratic inefficiencies, and build investor confidence in its long-term growth story. The Northeast has struggled to attract large-scale private capital, and Meghalaya’s budget, while visionary, faces the ultimate challenge of execution.

Infrastructure Boom: The Risk and Reward
Infrastructure is at the core of this budget, with a staggering ₹9,447 crore allocated to capital expenditure – a seven-fold increase from 2017-18. The most ambitious of these projects is New Shillong City, envisioned as a futuristic, non-motorized urban landscape with smart roads, heliports, and a cutting-edge business district. The state is also investing ₹2,873 crore into improving road connectivity, with projects like the Dhubri-Phulbari bridge and the Hili-Mahendraganj trans-national corridor with Bangladesh, aimed at transforming Meghalaya into a key regional trade hub.

While these investments promise to modernize Meghalaya’s infrastructure, history has shown that ambitious projects often falter at the altar of poor execution. Bureaucratic inefficiencies, project delays, and cost overruns have long plagued infrastructure development in India. Meghalaya’s ability to deliver these projects on time will determine whether this budget is a turning point or just another case of grand plans failing to materialize.

Tourism: The Billion-Dollar Gamble
Tourism has emerged as Meghalaya’s trump card, with ₹600 crore earmarked for luxury resorts, riverfront developments, and cultural centers. With a 33 percent increase in tourist footfall since pre-COVID levels, the state is betting big on its natural beauty and heritage to drive economic growth.

But heavy reliance on tourism comes with risks. The industry is notoriously seasonal, and
infrastructure bottlenecks could hamper the sector’s ability to sustain high visitor numbers.
Meghalaya’s fragile ecosystem also raises concerns about the environmental cost of rapid
commercialization. If this strategy is to succeed, the state must ensure that growth is sustainable, benefiting local communities rather than turning into an extractive industry that leaves behind ecological and cultural damage.

Agriculture and the Rural Economy: The Missing Link
While tourism may be the big-ticket revenue generator, Meghalaya remains an agrarian state at its core. The budget has recognized this by allocating ₹618 crore to agriculture, with a sharp focus on diversifying farm produce. Under the CM FARM+ initiative, farmers will be encouraged to cultivate high-value crops like black pepper, floriculture, and mushrooms. The CM ASSURE program, backed by ₹50 crore, seeks to protect farmers from distress sales by ensuring a minimum support price for produce like broom and areca nut.

However, funding alone will not solve the deep-rooted challenges facing Meghalaya’s farmers. Low productivity, weak market linkages, and the lack of cold storage and transport infrastructure continue to keep agricultural earnings low. Without addressing these structural issues, even the most well-intentioned schemes will fail to deliver meaningful change.

Powering the Future or Borrowing from It?
The ₹1,088 crore allocation to the energy sector signals Meghalaya’s intent to become self-
sufficient in power generation. The CM Solar Mission, offering a 90 percent subsidy on solar
systems, aims to bring decentralized energy access to rural areas. The state claims to have made dramatic progress in reducing transmission losses, bringing them down from 32 percent to 17 percent over the last five years.

Yet, even with these improvements, Meghalaya’s power sector remains heavily dependent on central assistance. The Meghalaya Energy Corporation Limited (MeECL) continues to struggle with financial viability, raising questions about whether the sector can ever become self-sustaining. Without structural reforms, power generation could remain a drain on state resources rather than the growth engine the government envisions.

The Fiscal Tightrope: Sustainability vs. Overreach

On the surface, Meghalaya has kept its fiscal deficit under control, maintaining it at 2.96 percent of GSDP – well below the permissible 3.5 percent limit. However, the state remains deeply reliant on external funding, with borrowings amounting to ₹4,788 crore. A large portion of Meghalaya’s revenue comes from centrally sponsored schemes and externally aided projects, making the state financially vulnerable if revenue generation does not keep pace with expenditure.

This raises a crucial question: is Meghalaya’s growth model sustainable in the long run? If private sector investments and internal revenue fail to match the projected expansion, the state could find itself on precarious financial footing in the years to come.

A New Model for India?
Meghalaya’s Budget 2025-26 is unlike any other in India – not just because of its ambitious
financial roadmap but because of the way it was crafted. By making budget formulation an
inclusive, democratic exercise, the state has introduced a governance model that challenges the conventional approach to policymaking. In a country where fiscal planning is often reduced to a bureaucratic formality, Meghalaya’s ‘People’s Budget’ offers a refreshing alternative.

The success or failure of this experiment will have implications far beyond Meghalaya. If the participatory model proves effective, it could compel other states to rethink how they engage citizens in governance. It could also push the Union government to explore more democratic approaches to budget-making, ensuring that financial policies are rooted in ground realities rather than being dictated by economic models divorced from public needs.

As the state moves forward, the larger question remains: is Meghalaya paving the way for a new era of governance in India, or is this just an ambitious but unsustainable deviation from the norm? The coming years will provide the answer. What is clear, however, is that the country would do well to watch Meghalaya’s experiment closely. If successful, it may just redefine the future of fiscal democracy in India.

(Bijoy A. Sangma is a development professional, policy analyst, commentator on governance, economic policies, social justice and religious freedom. He has previously worked with national and international organizations in leadership roles, contributing to thought leadership in public policy and social transformation. e-mail: [email protected] )

Also Read: Start-up fund for Meghalaya’s SHGs to be hiked to Rs 25,000

Also Watch

Find latest news from every corner of Northeast India at hubnetwork.in, your online source for breaking news, video coverage.

Also, Follow us on-

Twitter-twitter.com/nemediahub

Youtube channel- www.youtube.com/@NortheastMediaHub2020

Instagram- www.instagram.com/ne_media_hub

Download our app from playstore – Northeast Media Hub