Question

Evaluate zero base budgeting in India.

Answer 1

Zero base budgeting (ZBB) was adopted by the departments of the Central Government from April 1987 as a measure to control public expenditure. It is applicable to both developmental and non-developmental expenditures.

The Indian economic environment can be regarded as favourable for the implementation of zero base budgeting. Elements such as executive participation, clarity of work priorities, and the aim of achieving better administration support its adoption. However, there is a need to assess the impact of factors like multi-level decision-making and the absence of proper Management Information Systems (MIS), which hinder smooth execution.

For successful implementation, a comprehensive review of departmental activities is necessary. In the initial stages, the assistance of external experts may be required. Moreover, to ensure better understanding of ZBB’s objectives and concepts, it is essential to educate the public. Also, the training of executives, responsible for implementing ZBB effectively, may be supported through services of budget analysts.