In public finance and government budgeting, the term zero based budgeting refers to which type of budgeting approach used to plan expenditure?

Introduction / Context:
Zero based budgeting is a modern budgeting technique frequently mentioned in economic reforms and administrative efficiency drives. Unlike traditional methods that build on past figures, zero based budgeting forces planners to justify each unit of spending afresh. This question checks whether you understand what the term really means in a government or organisational budgeting context.

Given Data / Assumptions:

• The question is about the definition of zero based budgeting.
• The setting is public finance and government expenditure planning.
• We must distinguish this approach from other budgetary terms such as simple authorisations or inter agency payments.

Concept / Approach:
In zero based budgeting, every new budget cycle starts from a base of zero. No previous expenditure is automatically approved. Each department must clearly justify why it needs funds and demonstrate that proposed spending is linked to priorities and measurable results. This is different from traditional incremental budgeting where last year figures are adjusted up or down without full fresh review. The focus is on result orientation and efficient use of resources.

Step-by-Step Solution:
Step 1: Recall that zero based budgeting means starting the budget from a zero base.Step 2: Understand that every line of expenditure must be justified in terms of costs and benefits.Step 3: This ensures each rupee spent is linked to outcomes, not simply carried forward from previous years.Step 4: Compare with the options and identify which one emphasises justification and result orientation.Step 5: Option B clearly states that every rupee spent is result oriented, which matches the definition.

Verification / Alternative Check:
Administrative reform documents often describe zero based budgeting as a technique that obliges managers to review programmes from the ground up, eliminating wasteful or low priority activities. Training material also highlights that the key benefit is making expenditure more accountable and performance based. This confirms that the essence of the term is not about time periods or inter agency transfers but about justification from zero.

Why Other Options Are Wrong:
Option A merely describes an appropriation made by the legislature, which is true of all budgets and not specific to zero based budgeting. Option C talks about mandated reimbursement procedures, which are accounting items not linked to zero base logic. Option D describes internal charges between state agencies, again unrelated to the idea of starting from zero. None of these capture the core requirement of fresh justification of every expenditure item.

Common Pitfalls:
Candidates sometimes think zero based budgeting simply means cutting costs or reducing the overall size of the budget. In reality, it is about re examining priorities and ensuring that spending decisions are consciously chosen, even if some areas receive more funding. Another pitfall is mixing it up with performance budgeting or outcome budgeting; while related, zero based budgeting has the unique feature that no past expenditure is automatically assumed to continue.

Final Answer:
Zero based budgeting refers to a budgeting approach in which every rupee of expenditure must be freshly justified from a zero base, so that all spending is clearly result oriented.