Give an account of the budgetary control system in india
Answers
The budget is a vital part of planning and control and it represents as significant mechanism for performance evaluation. The budget is a document designed to assess income and expenditure over a time period usually the previous year and altered to accommodate any predictable variations. In universal terms, a budget is an assessment of the income and expenses over a specified future period of time.
Attributes of budget: A budget must have following features
It should reflect the managerial plans and policies to accomplish business goals and objectives.
It must be expressed in monetary or quantitative terms or both.
It is comprehensive plan for definite future period.
Though it is basically an instrument of planning, it still provides the basis for performance evaluation
the classification of budget flow chart in given below... as i couldnt change this flow chart by typing i have given it in this way
https://www.civilserviceindia.com/subject/Management/notes/images/classification-of-budget.png
The characteristics of budgetary control are as follows:
Establish target of performance/budget
Record the actual performance
Compare the actual performance with the budgeted
Establish the differences and analyse the reason
Act immediately for corrective actionsImportance of Budgetary Control: In management, there is great significance of budgeting control:
It increases competence
It reveals inefficiency positions
The causes of variances between the budgeted and actual are recognized to chart the remedial process.
It checks over-expenditure on the part of spending officer.
It reduces huge losses since it is a constant measuring of actual and budgeted.
Essentials of good budgetary control system:
Good budgetary system must fulfil following requirement (Shah, 2009):
It should be headed by senior management of organization.
Representatives of all departments should be made part of the budget committee.
Organizational goals must be clearly defined.
There should be proper management information system.
Periodic reports should be made to disclose the performance of budgeting system.
Effective follow-up system should be present.