Concept and History of Budgeting
Features of a budget
- It is a financial plan or programme guided by the socio-economic policy of the government for coming year;
- It is a plan of action with the approval from the legislature;
- It is an annual plan being guided by and intended to achieve the socio-economic objectives of the medium plan;
- The budgetary process involves formulation, approval, execution, and monitoring & evaluation; and
- It should be comprehensive, and include all estimated revenues and expenditures.
Objectives of budget
- Adjustment of resource allocation for economic growth;
- Adjustment of distribution of national income and wealth; and
- Maintenance of economic stability.
- Integration of expenditure decisions with the specified policy objectives and resource at present and future;
- Integrate the major budgetary decision with national economic situation;
- Make certainty in efficient and effective implementation of governmental programmes; and
- Help in legislative control on different phases of budgetary process.
- Prepares policy formulation structure in the selection of competing objectives;
- Means of policy implementation;
- Means of legal control of abuse of authority and use of fund extravagantly; and
- Document of public information on governmental activities in past, present and future.