Guidelines Outcome Budget

Outcome Budget in INDIA
Meaning
The Outcome Budget will be a progress card on what various

ministries and departments have done with the outlay announced
in the annual budget.
It is a performance measurement tool that helps in better service
delivery; decision-making; evaluating programme performance
and results; communicating programme goals; and improving
programme effectiveness.
The Outcome Budget is likely to comprise scheme- or project-
wise outlays for all central ministries, departments and
organisations during 2005-06 listed against corresponding
outcomes (measurable physical targets) to be achieved during
the year.
It measures the development outcomes of all government
programmes. Which means that if you want to find out whether
some money allocated for, say, the building of a school or a
health centre has actually been given, you might be able to. It
will also tell you if the money has been spent for the purpose it
was sanctioned and the outcome of the fund-usage.
The Outcome Budget, however, will not necessarily include
information of targets already achieved.
This method of monitoring flow of funds, implementation of
schemes and the actual results of the usage of the money is
followed by many countries.
How will it change the way the government works
The Outcome Budget, to be presented for the first time, will

discipline various ministries in their spending by ensuring that
they do not stagger it towards the last quarter of the fiscal.
The Outcome Budget is also aimed at changing the outlook of the
government officials. The idea is to make government
representatives more result-oriented and keep them from
delaying projects and asking for more expenditure to meet the
spiraling costs. The focus will shift from 'outlays' to 'outcome.'
It helps the government make its budgets more cost effective,
doubles up as a major device to fix accountability, and the
government manages its schemes better.
The Congress-led United Progressive Alliance government has
decided to release information on spending by various ministries
for public scrutiny. This will ensure that everyone: people's
representatives, the press, and those for whom the scheme is
being implemented can check for themselves how well a project
has been implemented. It thus gives the government more bang
for its buck.
The Outcome Budget will also help gauge the effectiveness of the
money spent on various heads by different ministries. It will also
help ensure that programmes and schemes do not continue
indefinitely from one Plan period to the next, without an
independent, in-depth evaluation.
The Outcome Budget is expected to ensure efficient service
delivery, transparency and accountability.
Which schemes will be under Outcome Budget
For starters, all Plan schemes will come under the Outcome
Budget as it is much simpler to associate expenses with the
results achieved in such development programmes.
Plan expenditure is an expenditure that the government plans to
incur on a scheme to be implemented in a given year. For
example, in the year 2003-04 (as per the revised estimates for
that year), the government had allocated Rs 2,588.62 crore (Rs
25.886 billion) for construction of national highways. This
expenditure that was incurred for construction of national
highways came in as a part of Plan expenditure.
However, the finance minister has said that from the next year,
the expected outcomes for non-Plan expenditure too would be
listed.
Non-plan expenditure is defined as expenditure committed by the
expenditure. Interest payments, pensions, salaries, subsidies and
maintenance expenditure are all non-Plan expenditure. Non-plan
expenditure is generally an outcome of plan expenditure. For
example, the national highways the government constructed in
the year 2003-04 and before, need to be maintained. All the
expenses going towards this is treated as non-Plan expenditure.
How will the ministries go about this exercise
From the fiscal year 2006-07, Outcome Budget will be part of the
main budget.
Every ministry will present a preliminary Outcome Budget at the
time of demanding grants from the finance ministry for any
scheme. This will help the government examine the expenditure
before it is made, instead of doing a post-expenditure inspection.
So at the very stage of planning a programme there will be a
mechanism of checks and balances. This will result in reducing
unnecessary expenses.
All ministries have already sent their Outcome Budgets and the
finance ministry has compiled them.
How will performance be gauged
While it is relatively easy to check if defence ministry has spent

its allocated funds or budget to buy new weapons system, it is
much harder to figure out how a particular sum spent on a village
helped lift the rural community there above the poverty line.
But some yardsticks that are used to check whether
implementation has been good or poor is by standardising
performance indicators like unit cost of delivery, the quality of
outcomes, capacity for required efficiency in terms of equipment,
technology, know-how and expertise.
Who will monitor this exercise
The finance ministry, together with the Planning Commission, will

keep an eye on whether the desired results are being achieved
vis-a-vis the money being spent on a particular scheme.
A Programme Outcome and Response Monitoring Division, under
the Planning Commission, will help coordinate the Outcome
Budget.
The Outcome Budget, after it is presented in Parliament, will also
be put up on the finance ministry's Web site for the public to
comment on it.

Guidelines Outcome Budget

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Outcome Budget in INDIA

The Outcome Budget will be a progress card on what various

How will it change the way the government works

The Outcome Budget, to be presented for the first time, will

Which schemes will be under Outcome Budget

How will the ministries go about this exercise

How will performance be gauged

While it is relatively easy to check if defence ministry has spent

Who will monitor this exercise

The finance ministry, together with the Planning Commission, will

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