FinancialAdministration: KautilyaArdhyasastra:Financearelinefeedofstate. Financialadministrationisanartandscienceofplanningorganisingimplementingandevaluating thefinancialresourcestoensuretheirbestusefortheachievementoftheobjectives,goalsand targetsofnationalprogrammes. Budgetissynonymouswithmanagementsincebothareconcernedwithsystematicintelligent planningandcontrol.Financeandadministratinareinseparable. Accordingtol.d.whiteadministrationisthedirectioncoordinationandcontrolofmanypersonsto achievesomepurposeorobjective. Thebudgethelpsinplanningpolicymakinganddecisionmakingwhicharealsothegoalsof administration. Importanceofthebudget:Problemsasthoseofunemployementandeconomicdeficienciescan alsoberemovedthroughbudgetingalone.Likeprovidingsocialadvantages(freemedicalfacilities, education).Goodandsoundbudgetingsystemismostusefulbothsocially,economicallyand politically.

Ultimatecontributionhastobemadebythepublic In1994therewasnoconceptofservicetaxatthattime. Legislatureistheproxy(800people)ofthepeopleofIndia. Agenciesthattakepartinfinancialadministration: 1Executive 2Legislature 3Accountingandauditingauthority(CAG,CGA) 4ParliamentaryCommitees(PAC,CPU,Estimatecommittee) Budget: Taylor:Financialplanofthecountry. Donick:Budgetifafinancialplansummarizingpastfinancialexperiences,statingcurrentplanand projectingitoverfuture.(1apr31march) Ruleofsanction,ruleoflapse(moneywillgotothefinance commission),incrementation,periodicity,principleofannuality,principleofbalanced budgeting(expenditure=revenue) Chainofcommands SanctionAuthority(almosteverycaselegislature)

ControllingAuthority(ministryoffinance) CompetentAuthority(Headofthedept,whichactuallyusethefund) DrawingandDisbursingOfficer(DDOs,thosewhoactuallywithdrawsthemoney) TypesofBudgetsonthebasisofInstitution 1)Executive;problems:lackofrationality,decidingirrespectiveofthewillofthepeople.(Most prominent) 2)legislature:willofthepeoplereflected,diversityofviews,viewsofalmostallpoliticalparties.Butit isdoubtfulwhetherlegislatureiscompetenetenoughtopreparebudget. 3)Commitees:Yougetexpertopinions,freefrompoliticalpressure,giverationalopinions.Prevalent insomestatesofUSA. TypesofBudgetsonthebasisofConstruction: 1)LineItemBudgeting:Itemsofexpenditurearearrangedinlineandexpenditureisallocated. Indian,u.k,U.sfollowthis. Bestpart: .Incorporateseverytypeofexpenditure. .StrongQualitativeandQuantitativeoutcomescanbeincludedinit. Controlisthere(Becauseofthese3reasonswearecontinuingthis) Negative: .Veryunscientific.(Botheredaboutthespendingnotoutcome.) .noexactinputoutputrelationship 2)Negative: .Perpetuatesinefficiency. 2)Programmingperformacebasedbugetingsystem: Steps; Objectiveidentification, makealistofprogrammesonthebasisofcostbenefitanalysis. Classificationofprogrammesintomultipleactivites.

Establishingorsettingofcriteriaforevaluation Systemofaccountingandreporting Performanceauditing. Assumption:Rolesandresponsibilitiesareveryclearinadvance. RecommendedbyhoovercommissioninU.S Bestpart; .Leadstoeconomicuseofscarestresources. Verystronginherentfeedbackmechanism Establishinputoutputrelationquitestrongly. Fixationofresponsibity Canbeusedwherequatitavepartsarestronger. Canbeappliedonindividualprojectbasis. Cannotbeappliedonwholebudgetingsystem. UsedinAdministrativereformcommission,CADP(commandareadevelopmentprogramme) Negative: Difficultyinobjectiveidentification(socialprogrammesdohavemultipleobjectives) Qualitativeitemsofexpenditurecannotbejudgedonthebasisofcostbenefitanalysis. Requiresspecificskill(costbenefiranalysis,itsaverycomplicatedthingrequiresexpertsupport) 3)PPPBS(Planning) Planningpartbyplanningcommission. Everytimewhennewgovtcomesvicechairemenofpcchangesandtemporaryvicechairemenwill notallowothersinterest. Benefits: Facilitatesalignmentofbureaucracy Systematizationofbureaucracy. Demerits: Requireslotofcooperationofdifferentagencies Requireslargebureaucraticsetups 4)ZeroBasedBudgeting: Pastexprerencesofprogrammesaresupposedtobezeroorinsignificant. Benefits

DegreeofeliminationisstrongerthanPPPBS. Reducethesizeofdeficit(inputandexprenture) Demerits Avoidstheprincipleofmaturity(gestationperiod) 5)Outcomebasedbudgeting: Quantitativeresult:output Qualitativeresult:outcome. Merits Emphasizesonend Inherentlyprovidelotsofdiscretiontotheexecutive. Demerits Foralldeptsettingoutcomeisdifficult. 6)Genderbasedbudgetinhg: Moreadminisrequired. Otherprogramemphasisisonmeans 7)LumpSumbudgeting:Withoutknowledgeoftheparticularpurposetowhichthefundswouldbe used. Likeinwars.