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PUB AD PYQ VAULT | Day 55 | PYQ (2015)
Discuss the concept of Zero-Based Budgeting and examine its experience in India.
Keyword of the Day | Zero-Based Budgeting (ZBB)
A budgeting technique in which every expenditure must be justified afresh for each budget period rather than automatically carrying forward the previous year’s allocations. Peter A. Pyhrr developed the approach in the late 1960s.
Every budget cycle begins from zero expenditure is approved on the basis of need, priority and justification. A government department must justify its training, travel and administrative expenses instead of simply requesting last year’s allocation plus an increase.
Thinker of the Day | Aaron Wildavsky
Work – The Politics of the Budgetary Process
Views
- Budgeting is not merely a technical exercise in allocating funds it is a political process shaped by bargaining, competing priorities and incremental adjustments.
Budgeting – Budgets are generally built through adjustments to previous allocations.
- Budgetary Bargaining – Agencies and decision-makers negotiate over limited resources.
- Political Nature of Budgeting – Allocations reflect power, priorities and institutional interests.
Annual Union Budget allocations often involve balancing existing expenditure commitments with new priorities such as infrastructure, welfare and defence.
Wildavsky views budgeting as incremental political bargaining, in which past allocations, institutional interests and competing priorities shape present expenditure decisions.
