Zero-Based Budgeting: A Fresh Start for Financial Planning in India

Although this budgeting method is time-consuming, this is a more appropriate way of budgeting. This includes an all-inclusive analysis of the budget proposal and if the managers make irrelevant variations so as to achieve what they want, they are probably exposed. The success stories of ZBB in India highlight its growing relevance in a rapidly evolving economic landscape. As organizations seek to optimize resources, drive innovation, and remain competitive, ZBB offers a structured and strategic approach to budgeting that can unlock significant value.

Some government departments reported significant cost savings and improved efficiency due to the rigorous scrutiny of expenses that ZBB demanded. However, the implementation process proved to be time-consuming and resource-intensive, especially for large and complex organizations. The aim of this study, therefore, is to ascertain whether the perceived benefits of Zero-Based budgeting would significantly influence its adoption in Borno state. Stratified sampling technique was used to arrive at a sample size of 103 drawn from the total population of 139. Binary logistic regression was employed to predict whether the predictor variable namely, perceived benefits have significant influence or not on the dependent variable, that is, the adoption of ZBB. By acknowledging and addressing these challenges head-on, Indian organizations can successfully implement ZBB and reap its numerous benefits.

The statistical population comprised five top-level managers categories, including 150 respondents, eight mid-level managers, 240 respondents, and 12 lower-level supervisory cadres of 360 respondents. Primary Data was collected using an Interview Schedule developed explicitly for the purpose and finalized after conducting the pilot survey. Secondary data were collected from published articles, the Companies Act, the Accounting Standards Manual published by the Institute of Chartered Accountants of India, Websites, journals, and other validated material. Data analysis uses Statistical Package for Social Sciences (SPSS), and interpretations are made based on statistical tools. The results of the research indicated that most Indian companies set budgeting systems in accordance with accounting standards.

Descriptive statistics and simple regression were adopted in analyzing the data. The main disadvantage of zero-base budgeting is the very high level of effort needed to examine and document department activities. This is a difficult task even once a year, which causes some entities to only use the procedure once every few years, or when there are noteworthy changes within the organization. Another substitute is to require the use of zero-base budgeting on a rolling basis through different parts of a company over several years, so that management can deal with fewer such reviews per year. Zero base budgeting needs an enormous amount of analysis, meetings, and reports, all of which requires extra staff to manage the process.

It expresses strategic plans of business units, organizations, activities or events in measurable terms The objective of the study is to determine whether the budgeting affect the quality of services delivery in production. The research also aims at determining whether the budgeting contributes to the improvement of management efficiency and high productivity. Zero-based budgeting is a budgeting technique to prepare completely new budget from zero based with proper analysis. Nowadays the Zero-based budgeting technique is very popular among the business organizations to sustain from increasing business uncertainties, economic crisis and recession. The main features of this technique are high employees’ involvement and removal of inefficient activities from the decision units.

• While it does require initial investment, the long-term benefits in terms of cost savings and improved efficiency far outweigh the initial effort.
• The zero-based budgeting is best suited to discretionary costs, for example, research development, advertising and training costs.
• ZBB is best suited to discretionary costs, for example, advertising, research development and training costs.
• ZBB is an important technique in which unnecessary expenditures are eliminated from the proposed budget.

Some managers may try to manipulate their budget reports to concentrate expenditures under the most important activities, thus ensuring that their budgets will not be reduced. It can be problematic to control or validate expenditure levels for areas of a business that do not produce “concrete,” tangible results. The operational evaluation authorized by zero-base budgeting requires a significant amount of management time.

India’s encounter with Zero-Based Budgeting (ZBB) dates back to the 1980s, when the government introduced it in select departments as a means to improve resource allocation and financial discipline. This marked the beginning of a complex and evolving relationship between ZBB and Indian organizations. ZBB helps policy makers to achieve more cost-effective delivery of public services.

Maximizing Your Tax Benefits with a Home Loan…

Using a stratified random sampling technique, 250 members of senior staff was drawn from the staff population. Further breakdown of the sample comprised of 120 academic staff and 130 non-academic staff of the university proportionately. A researcher constructed instrument was used to collect information from the respondents. Data was statistically analyzed using mean and independent t-test statistics.

The 70-20-10 Rule: Your Roadmap to Financial Success in…

• Budgeting is very important and it determines the way in which the organization can attain its financial and other goals.
• Zero-based budgeting starts from zero, rather than a traditional budget that is based on previous budgets.With this budgeting approach, you need to justify each and every expense before adding it to the actual budget.
• It also reduces dependence on purchased inputs as it encourages use of own seeds and locally available natural fertilizers.
• The main objective of the process is to constantly refocus finance on business objectives, and dismiss or scale back any activities no longer related to those objectives.

Managers need special training in the zero-base budgeting process, which further increases the time required each year. This research work was focused on exploration on the use of budgeting in my home industries. A budget is a quantitative expression of a plan for a distinct period of time. It may include deliberate sales volumes and revenues, resource zero based budgeting in india quantities, costs and expenses, assets, liabilities and cash flows.

In some cases, private businesses have been more prosperous through this exciting process than governments. The zero-based budgeting is best suited to discretionary costs, for example, research development, advertising and training costs. You can ask your employees what kind of expenses the business will have to bear and figure out where you can control such expenses. If a particular expense fails to benefit the business, the same should be axed from the budget. Zero-based budgeting is primarily used in business but it can be used by individuals and families, too.

Gullak App Review: A Digital Piggy Bank for Gold (…

Zero Base Budgeting – an emergent form of budgeting to overcome the limitations of traditional budgeting. We strongly recommend that you consult with a qualified financial advisor or professional before making any financial decisions or implementing ZBB within your organization or personal finances. However, it is a time-consuming process and needs immense experience to justify every line item in the budget. The goal of ZBB is to identify and eliminate frivolous/redundant expenses and focus on the priorities.

Schedule 80GGA Deductions: Maximize Your Tax …

The motivation behind this discussion was to seek a better understanding and familiarity with each of the various approaches to budgeting. None of them, however, can be regarded as a complete solution to budget problems. Each approach carries both strengths and weaknesses and thus cannot be applied indiscriminately to any given situation or financial environment. A solution for any budget problem depends on the nature of the organization affected and hence would require a thorough assessment of its operating environment before being carried out. The objective of this study was to develop specific strategies that could be used to ease the implementation of a zero base budgeting (ZBB) information system.

It was recommended among others that university management should ensure timely release of funds an efficient management accounting system for improved budget implementation in the university. Zero-based budgeting is a powerful tool for organizations seeking to optimize resource allocation and improve financial discipline. However, its complexity and implementation challenges must be carefully considered before adoption. When applied strategically, ZBB can lead to significant cost savings and operational improvements, making it a valuable approach for businesses aiming for efficiency and fiscal responsibility. The decision package is a document that identifies and explains the specific and goals and objectives, measurement of performance, costs, benefits and alternative courses of action. Ranking of decision packages is then accomplished at each management level until a comprehensive agency wide ranking is obtained.

The Indian government has recognized the potential of Zero-Based Budgeting (ZBB) as a tool for improving fiscal discipline, resource allocation, and overall efficiency in public spending. Over the years, the government has taken several initiatives to promote and encourage the adoption of ZBB across various departments and agencies. The future of ZBB in India looks promising, with growing recognition of its potential to address the challenges of a rapidly changing economic landscape.

The Future of Finance in India: Trends to Wat…

Due to the specific public institutions to operate within unproductive area, financial planning is primarily to determine the need for financial resources they need in the future. Today, budgets are considered by many as a powerful tool to conduct and control an organization’s internal and external affairs. Budget, budgeting, and budgetary controls are the priority of every manufacturing and service entity. Top management in organizations uses budgets to monitor and control the financial and nonfinancial activities that occur within their organization. The current research method is empirical, which tests the feasibility of a solution using empirical evidence based on statistical applications. The study considered SENSEX 30 companies listed on the Bombay Stock Exchange.

India’s Financial Resilience: Navigating Glob…

Many organizations are attracted to ZBB’s potential for cost savings and improved resource allocation, especially in industries facing intense competition and cost pressures. Zero-Based Budgeting (ZBB) is a powerful budgeting method that challenges the traditional incremental approach. Instead of building on the previous year’s budget, ZBB starts from scratch, requiring every expense to be justified anew. While it has gained traction globally, its implementation in India has a unique history and potential. Implementing zero-based budgeting is not solely an accounting decision and must be considered in relation with the company’s overall business strategy and goals. While a zero-based budget may help companies better reduce costs, they may completely change the value of the company and its culture.