Publish On: 2019-04-23

Jacob sum

Total Post: 464

Question: What is budget and budgetary control

Reply On: 2013-09-01


Total Post: 8

ANS: What is budget and budgetary control

The budget and budgetary control form the backbone of any control system. Till 1960, PSUs were characterized as entities devoid of budgeting and budgetary control systems. It was only on the renewed insistence of the estimates committee, public accounts committee, committee on public undertakings and administrative reforms commission that these enterprises introduced budgeting.

PSUs prepare a master budget which is supported by budgets classified partly under three heads, viz. Revenue, capital expenditure and cash budgets. While enterprises such as steel authority of Indian limited and Bharat Heavy Electrical Limited have earned the distinction of being good planes and executors of the area of budgeting and budgetary control, there are scores of other PSUs which are yet to accept the budget philosophy. The budget targets are evolved not by consensus but from top down to bottom. The incremental approach to budgeting overshadows the zero –base and program-cum performance approaches. The budgeting system is not supported by a proper backup of the management information system.


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