Zbb zero based budget in Indian Railways

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Presented By

M.Nageswara Rao, SSO(A)/Hqrs/SC

Presented By

M.Nageswara Rao, SSO(A)/Hqrs/SC

Definition – Zero Based BudgetDefinition – Zero Based Budget

Saturday, December 21, 2013 2

- starts from a "zero base" -every function within an

organization is analyzed for its needs and costs.

-Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous

one.

Unique feature - ZBBUnique feature - ZBB


“Suppose we are to start our business from scratch, on what activities would

we spent out money and to what activities would we give the highest

priority?”

It tries to help management answer the

question,

ZBB - OutlineZBB - Outline


Peter A. Pyhrr is the Godfather of

zero-base budgeting

ZBB - Outline


ZBB - OutlineZBB - Outline



Before leapt into ZBB, let us have known about

Traditional Incremental/ Historical Budget

Salient features of Traditional Budget


Salient features of Traditional Budget


Now, its time for ZBBNow, its time for ZBB


Salient features of ZBB


Salient features of ZBB


Steps involved in ZBB




Traditional Budgeting vs Zero Base Budgeting

Traditional Budgeting vs Zero Base Budgeting

Basic difference Traditional Budgeting Zero Base Budgeting

Emphasis It is accounting oriented;emphasis on “How Much”

It is more decision oriented; emphasis on “Why”

Approach It is monitoring towards the expenditures

It is towards the achievement of objectives

Focus To study the changes in the expenditures

To study the cost benefit analysis

Communication It operates only Vertical communication

It operates in both directions horizontally and vertically

Method It is based on the extrapolation i.e. from the yester figures future projections are carried out

Its decision package is totallybased on the cost benefit analysis.

ZBB - Advantages


ZBB - Advantages


Disadvantages of ZBB

Difficult to complete review of all the expenditure within a limited timeframe.

Loss of long term planning

(due to planning for every

year) Not possible for depts like R&D etc, with intangible outputs.

Costly and complex method.


Now, check for progress of ZBB in India






Zbb zero based budget in Indian Railways

Economy & Finance

zbb outline

salient features of

progress of zbb

unique feature zbb

based budget

outits decision package

decision oriented emphasis

zbbtraditional budgeting