2021, Vol. 3, Issue 1, Part E

Author(s): Manjula Grover

Abstract: This paper examines the evolution and implementation of Zero-Based Budgeting (ZBB) in India’s governance framework analysing its conceptual foundations, historical trajectory, practical challenges, and continuing relevance. ZBB demonstrates a shift from the more traditional incremental budgeting, as it requires each spending unit to justify all expenditures for each budget cycle starting from a “zero base”. This paper examines the evolution, theoretical foundations as well as rational, and contemporary value of ZBB in India’s public sector. The paper traces the genesis of ZBB, starting in the corporate sector in the 1970s, being introduced in India’s governance system by the Ministry of Finance (MoF) in 1986, and supported by various efforts in implementation across central ministries and states such as Karnataka, Andhra Pradesh, and Rajasthan. Early experiments highlighted ZBB’s potential in trimming unnecessary schemes and facilitating targeted spending. However, widespread application was unachievable due to bureaucratic inertia, limited information systems, and political interference. The paper identifies implementation barriers as institutional, resources, data, and political factors, and emphasizes the duality of technical feasibility and political economy. International experiences with selective utilization of ZBB provide comparative insights and confirm ZBB as a tool for targeted budgeting rather than a universal budgeting method. The paper concludes that ZBB has potential as a budgeting tool to improve fiscal discipline, increase transparency, and prioritize public expenditures that reflect national priorities provided it sustains its inclusive nature and provide a safe means for creating inventories of expenditures in the context of public services when simultaneously used with modern reforms such as Public Financial Management system (PFM) and Outcome-Based Budgeting (OBB). The study also advocates a selective but regular use of ZBB in priority sectors with good administrative commitment, and relevance of technological support systems to overcome historic limitations.

Pages: 389-394 | Views: 1255 | Downloads: 786

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