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.
(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