Budget
Budget is a statement of estimated receipts both revenue / income and expenditure of government in respect to a financial year.
Performance budget:
- Performance budget act as Output oriented budget with long-range perspective so that resources can be allocated effectively or efficiently.
- It presents the budget in the form of functions, programs, activities, and projects.
- Established correlation between physical performance and financial aspects of each program. It leads to a functional classification of the budget.
Nature of financial administration:
- Remove inequality of income, transfer income from rich to poor.
- Ensure proper functioning of economy through taxation, expenditure, debt.
- Facilitate a smooth flow of investment and its optimal allocation to increase national income.
- Stabilize inflationary trends.
- Make state a producer of both public and private goods to maximize social welfare.
Purpose of budget:
- Ensures financial, legal accountability of executive to legislature.
- Ensures accountability of subordinates to superiors in administrative hierarchy.
- Facilitates efficient execution of functions and services of government.
- Administrative management and coordination is facilitated as various activities of government departments are unified into a single plan.