li   inan e in ndia     18.23
     from top to bottom from a hypothetical zero                         allocating funds to the different needs
     base.53                                                             of the economy, an order of priority is
          There are three essential principles of ZBB.                   prepared with utmost objectivity. As the
     Some experts say it in a different way, there are                   resources/funds are always scarce, in the
     three essential questions which must be answered                    process of prioritised allocation, the item/
     objectively before going for any expenditure as per                 items at the bottom might not get any
     the techniques of ZBB:                                              funds.
           (i) Should we spend?                                      Side by side its benefits, there are certain
                                                               limitations too before the ZBB which prohibits
         (ii) How much should we spend?
                                                               its assumed success, according to experts. These
        (iii) Where should we spend?                           limitations have made it subject to criticisms. The
          There are three special features of this             limitations are as given below:
     budgeting which distinguishes it from the                       (i) There are certain expenditures upon
     traditional budgeting. These features, in brief, are                which the government/parliament does
     as under:                                                           not have the power of scrutiny (as the
           (i) The conventional aggregate approach                       ‘Charged Expenditure’ in India).
                is not applied in it, in which each                 (ii) There are certains public services which
                department of the government prepares                    defy the cost-benefit analysis—defence,
                their own budget for many activities                     law and order, foreign relations, etc.
                in the aggregate and composite form,               (iii) Scrutiny is a subjective matter and so this
                making it difficult to scrutinise each                   might become prey to bias. Again, if the
                and every activity. In place of it every                 scrutinisers have a complete utilitarian
                department needs to justify its existence                view many long-term objectives of
                and continuance in the budget document                   budgeting and public policy might get
                by using the mathematical technique of                   marginalised.
                econometrics, i.e., cost-benefit analysis.
                                                                   (iv) It has scope for emergence of the
                In a nutshell, every activity of each                    Ministry of Finance as the all-powerful
                department is ‘X-rayed’ and once the                     institution dictating other ministries and
                justification is validated they are allocated            departments.
                the funds.
                                                                    (v) Bureaucracy does not praise it as it
         (ii) Economy in public expenditure is the raison                evaluates their decisions and performances
                d’etre of this budgeting. This is why the                in a highly objective way.
                ZBB has provisions of close examination
                                                                     Despite the above-given strong limitation, the
                and scrutiny of each programme and
                                                               ZBB has a sound logic and should be considered
                public spending. Finally, the public
                                                               a long-term budgetary reform process. The basic
                spending is cut without affecting the
                                                               idea of this form of budgeting is to optimise the
                current level of benefits of various public    benefits of expenditure in every area of activity
                services accruing to the public.               and in this sense it is exceptional. To the extent
        (iii) Prioritising the competing needs is              the corporate world is concerned, this has been a
                another special feature of ZBB. Before         very successful financial management tool.
       53.     icholas Henry, Public Administration and Public       In India, it is believed to be in practice since
              Affairs, p. 218.                                 1997–99. We cannot say that India is a success in