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Advantages And Disadvantages Of Budget In Government

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Budget is a most essential process for any government in administrating the organisation to achieve the objectives that has been set out in the manifesto. Therefore in order to achieve those objectives, government need to have an adequate supply of money and spend it efficiently (Bissessar, 2010). Budget is a tools that tell the organisation how much to spend, where to spend and when to allocate resources which are always in scarce. A better managed budget will lead to a better quality of life and successfulness of the entire economy. According to Bissessar (2010), budget has multiple dimensions. First dimension is the problem of allocation of resources between the public and private sectors of the economy. While the second dimension is the budget must be balance between the amount received and the amount spent (income and expenditure). Thus, while on the one hand resources are disbursed, on the other hand through taxes and revenues, revenues are collected. Budget is a tool and mechanism that help government to limit managerial freedom of choice and as a result it helps government reduce the public …show more content…

This is the simplest budget system than commonly used by another countries as well during the earlier period. It is based on line item expenditure or objects of expenditure. Normally there are five objects or items of expenditure used which are emolument, services and supplies, assets, grant and charged expenditure and other expenditure. The total expenditure should not exceed the pre-determined total allocation. Otherwise, the budgeted expenditure will be reduced to ensure it is within the allocation budget. The weaknesses of TBS can be seen as it did not consider qualitative factors rather than quantitative factor. The quality of the yearly budget was not taken into consideration. However, there are several advantages of TBS which are (Rauf et al.,

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