zero based budgeting
Post on 12-Apr-2017
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ZERO BASED BUDGETING
Under
Public sector undertakings
Lets see ….what is meant by “PUBLIC SECTOR”
The government-owned corporations are
termed as Public Sector Undertakings (PSUs)
in India. In a PSU majority (51% or more) of
the paid up share capital is held by central
government or by any state government or
partly by the central governments and partly by
one or more state governments.
The objective of zero based budgeting is to reset the clock each yearPeter pyhrr was the father was zbb
Peter Pyhrr was the father was
ZBB
The objective of zero based
budgeting is to reset the clock each
year
MORE ABOUT ZBB
Now its time for
A method of budgeting in which all expenses
must be justified for each new period. Zero-
based budgeting starts from a "zero base" and
every function within an organization is
analyzed for its needs and costs.
When V.P Singh was finance minister of
India, zero based budgeting was
introduced in the central govt dept in
1986-87. The problems faced by the
central govt at that time was mounting
non- plan expenditure and decline in
public savings . Defence expenditure,
interest payments and subsidies formed a
major portion of non-plan expenditure.
history
ADVANTAGES
Out of date inefficient operations are identified
Allow manager to quickly respond to changes in
external environment
It promotes questioning and challenging attitudes
It helps the management to design and develop
cost -effective techniques for improving.
DISADVANTAGES
Increased paper work
Cost of preparing many packages.
Small organizations cannot afford it
The process of ZBB requires experience , intelligence,
expertise, and continues training on the part of
executives. Thus ,it is not suitable for
an ordinary organization.
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