Economics · Public Finance and Budgeting

Assertion: Zero Based Budgeting is considered a superior technique for resource allocation in government departments and service organizations compared to traditional incremental budgeting, especially during periods of fiscal austerity. Reason: Traditional budgeting methods often lead to the perpetuation of existing programs without a thorough review of their continued relevance, whereas Zero Based Budgeting forces managers to justify every rupee of their budget request by demonstrating the cost-benefit of each activity from a base of zero, thereby facilitating the elimination of waste and alignment with strategic priorities.