Q.Write a note on 'Zero based budget'.

Zero-based budgeting starts every year from 'zero': each department must justify every rupee of proposed expenditure afresh, rather than merely adding to last year's figures.

In the Tamil Nadu HSC Commerce syllabus (Fiscal Economics), the Zero-Based Budget is studied as a modern approach to government budgeting.

• Under traditional (incremental) budgeting, last year's expenditure is taken as the base and only additions/cuts are debated.
• Under Zero-Based Budgeting, the base is taken as zero — every scheme and expenditure item is examined and justified freshly each year on the basis of its costs and benefits. …