Budgetary Reforms and New Public Management in India: Transforming Fiscal Governance in a Developing Democracy

Budgetary reforms in India represent a central pillar of administrative modernization and fiscal governance transformation in the world’s largest democracy. Over the past three decades, India has progressively adopted principles associated with New Public Management (NPM)—efficiency, transparency, performance orientation, and accountability— within its public financial management system. Reforms such as the Fiscal Responsibility and Budget Management Act, outcome budgeting, digitized financial transfers, and integrated expenditure monitoring systems have sought to align fiscal discipline with developmental objectives. These measures aim to rationalize expenditure, enhance transparency, and strengthen institutional oversight while enabling the state to respond effectively to complex socio-economic challenges. Despite measurable gains in fiscal discipline and service delivery efficiency, persistent structural constraints—fragmented frameworks, intergovernmental coordination gaps, and data limitations—continue to impede full realization of reform goals. This paper critically examines India’s budgetary reform trajectory through the lens of NPM theory, evaluating achievements, limitations, and future directions. It argues that sustained institutional reform and technological integration are essential to building resilient fiscal governance in developing democracies.