The budget is a vital, principle tool of Financial administration and is most powerful instrument of legislative control. Budget has mentioned important aspects as larger number of Policy questions in the course of making fiscal outputs. The term budget refers to the Financial papers. It has develop in middle ages, which has a feature of Absolute English regime as well as Europe.
The budget was a statement of revenue and expenditure and regarded as business affairs of the king and the state. Revenue was derived from king’s domains. At this time, all governmental expenditure were not subjected to parliamentary control. Full legislative control of main string of the century. Thus, the conception of the budget as the central tool of financial direction and control on monetary standards.
The budget system is the basis of efficient fiscal management. According to W F Willoughby, the real significance of budget system lies in providing for the orderly administration of the Financial affairs of a government. Fiscal management consists continuous chain of operations such as estimates of revenue and expenditure, revenue and appropriation acts, accounts audit and report.
The Public Account Committee states the object of budgeting in the form of “The budgeting is designed to provide for parliamentary control, for Administrative account that the expenditure incurred by the government is in the specific manner by specific authority.
Objectives of Budget
• To structure delegation of operations as well as financial authority and responsiblity, by providing the basis for central control
• To conduct regular periodic reconsideration or revaluation of government purpose and objectives.
• To provide the framework of public account and fiscal accountability.
• To provide the legal basis for the expenditure of Public funds.
• To facilitate a comparative evaluation of different purposes and programmers in relation to each other and their relative cost.
Functions of Budget
The function of government budgeting is to administer the National finance in organized manner. No haphazard and unplanned expenditure and revenue. Financial operations of the government are to be properly planned and implemented through budgeting.
Functions as instrument of execution of the economic Policy of the government. An approved budget gives the administrator, a zest of the financial environment within which has to work out. During budget, the budget supplies data for decision making and acts as a guide to various departments heads for what they have to do. Budget is an instrument to make elected legislators accountable to the people and to the democratic system. It also secure the economic, social and cultural rights of people.
The also Important as review of the past accomplishment contains the figures of the previous financial years. In order to manage or set budgetary expectations reviewed by previous budget. Budget helps in knowing where Public money has been spent in favour of law and how far objectives has achieved.
Fundamentals of Budget
- Planning and programming
- Research of statistics and global conditions
- Control Supervision
- Balance Budget
- Estimation of one year expenditure
- Executive Discretion
- Combination of Revenue in one unit
Significance of Budget
The goal of Administration is to attain economy and efficiency and budget plays important role in financial administration. It promotes rational planning effective Policy making and sound Decision Making to give strong foundation for attaining political and social objectives. The budget can help to promote policies and help in redefining the policy structure. Financial allocation of budget identified in physical outputs. Good Budget consider all aspects for financial and economic policies.
Organising the staffing require for creation of budget, all financial department to be included in the budget. To make administration effective need to apply overlapping. Direction with several departments and linkage of communication can strengthen the system. Coordination ensure the avoid of duplication and wastage and increase the effectiveness of implementation of Financial policies.
Reporting budget on widely discussed newspapers and journals for the information to Public for constructing their own opinions. Budget can supplement the efforts of government in supporting the policies for all section of Society. Modern technology helps connect with innovative changes in the areas of leadership, communication, decision making, democratisation of the organization. Above it, it makes possible to introduce and expedite the use of information technology in Financial administration.