Question

What is the inefficiencies during budgeting for the government accounting?

Answer 1

Government Budgeting is an annual exercise , which is called Fiscal budget and is prepared for every Fiscal year. Government budget basically consist of two elements. Revenue and Expenditure.

Revenue is mainly from the Taxes , direct or indirect on different segments of the Industry, Individual and corporations.

Expenditure is on Infrastructure , government consumption, research and development , scheme for unemployment etc.

Expenditure includes Revenue Expenditure as well as Capital Expenditure. Government budgets have economic, political and technical basis. The total resources are allocated in such a manner to optimize the utilization and to the best economic use.

Inefficiencies in budgeting for government accounts:

• Mainly the inefficiency lies in what the expenditure was planned and where it has been spent. The major concern is whether the money spent was properly authorized and money has been well spent. The accounting is kept for the money spent but it is hardly seen that how utilization has been done , is the most missing thing and it has become the inefficiency of budgeting.
• Second major inefficiency is about the qualitative aspect after spending. There are no methodology to judge whether the quality of life of a common man has improved or not. It has been seen that even after years after years of budgeting and spending , the life of common man doesn’t improve so the budgets are incapable of incorporating these facts.
• Business management by the government committees and agencies are not done effectively and the total receipts and payments are not kept as per fair .sbusiness practices.