What are your thoughts on performance based budgets Nakita and class? This type

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Explanation / Answer

Performance based budget is essential for the stability of economy and to drive results. One of the best form of performance based budgeting is Zero based budgeting in which the project is appraised every year and further allocation to the project is based on outcomes rather than notion that project is in middle or substantial allocation has been done in the past.

Corporate budget is prepared to earn profits and focused on outcomes but government play two roles and both role are contrasting . On one hand government has to earn profits and on other hand it has to devise plans such that rights of marginal in soicety is protected.

Pros

* It will drive effeciency and effectiveness of government budgeting.

* It bring stability to economy

* It help in prevent buget delays and cost overran.

Con's

* In order to earn profitability the marginal may not it's due share in income distribution and the marginal may become worse off.

* Inequality in economy will rise. Rich will become more rich by having larger chunk of national income.

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