As the name suggests, zero-based Budget refers to planning and preparing the Budget from scratch or ‘zero base’. It is different from a traditional Budget that is based on previous Budgets. The process of zero-based budgeting involves review and justification of each and every ministry’s expenditure in order to receive funding at the beginning of each financial year.

In zero-based Budget, no balances are carried forward, or there are no pre-committed expenses. Simply put, it is a procedure for preparing a Budget with zero prior bases.

Under zero-based Budget, all budgeting begins from a ‘zero base’ every year; that is, expenses must be justified afresh each year, no matter what was spent in the year before.

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