- i. The Indian Administrative Reforms Commission (ARC) defines a performance budget as, i. The Indian Administrative Reforms Commission (ARC) defines a performance budget as, technique for presenting government operation in terms of functions, programmes, activities and projects. '
- ii. Mayor Committee of New York chooses the term 'programme budget' for 'performance ii. Mayor Committee of New York chooses the term 'programme budget' for 'performance A programme budget tells in advance what activities budget'. In the words of this Committee, ' the Department and Government as whole are authorized to carry forward in terms of expenditure for a given year.' It emphases on the work to be done.
- iii. meaning of performance budgeting becomes very clear from the definition of Burkhead. He iii. meaning of performance budgeting becomes very clear from the definition of Burkhead. He performance budgeting can be most appropriately associated with a budget classification says, ' that emphasis the things which Government does, rather than the things which government buys. Performance budgeting shifts the emphasis from the means of accomplishment to the accomplishment itself.'
- iv. Hoover Commission of the USA also explains the concept lucidly in the words as, 'the iv. Hoover Commission of the USA also explains the concept lucidly in the words as, 'the whole budgetary concept should be refashioned by the adoption of budget based on functions, activities and projects, this we designate as a performance budget.'

Thus, an analysis of the above definition reveals that performance budgeting is a process that seeks the implementation and control of programmes through budget allocation. It starts by analyzing the objectives of an organisation and deciding under what generally heading its expenditure can best be analysed functionally. Objective of performance budgeting: of performance budgeting: The Working Group of the ARC of India stated the following primary objectives of the performance budgeting:

- i. co-relate the physical and financial aspects of every programme or activity; i. co-relate the physical and financial aspects of every programme or activity;
- ii. improve budget formulation, review and decision making at all levels of management in the ii. improve budget formulation, review and decision making at all levels of management in the government machinery;
- iii. facilitate better appreciation and review by the legislature; iii. facilitate better appreciation and review by the legislature;
- iv. make possible more effective performance audit; iv. make possible more effective performance audit;
- v. measure progress towards long term objectives as envisaged in the plan; v. measure progress towards long term objectives as envisaged in the plan;
- vi. bring annual budget and development plans closely together through a common language; and vi. bring annual budget and development plans closely together through a common language; and
- vii. pave the way generally for an overall efficient financial management in the government. vii. pave the way generally for an overall efficient financial management in the government.

Important characteristics: characteristics: Following are some of the important characteristics of performance budget:

- i. represents the major purpose for which funds are allocated and sets measurable objectives. i. represents the major purpose for which funds are allocated and sets measurable objectives.
- ii. budgeting tends to focus on changes in funding rather than on the amount ii. budgeting tends to focus on changes in funding rather than on the amount appropriated for the previous budget cycle.
- iii. budgeting mainly emphasis on the results to be accomplished. iii. budgeting mainly emphasis on the results to be accomplished.
- iv. budget presents greater managerial suppleness by providing the program or iv. budget presents greater managerial suppleness by providing the program or department manager a fixed lump sum distribution that may be used for various needs in order to accomplish the agreed upon results in service delivery.
- v. identifies programs and agencies that are seeking similar outcomes, thereby drawing such inter- v. identifies programs and agencies that are seeking similar outcomes, thereby drawing such inter- relationship to the legislature's attention.
- vi. budgeting tries to resolve issues related to decision making problems. vi. budgeting tries to resolve issues related to decision making problems.
- vii. characteristic of the performance budget procedure is the identification of the objectives vii. characteristic of the performance budget procedure is the identification of the objectives of the budget management to be incorporated with overall responsibility, so that good budgetary performance is compensated and impose restriction for poor performance.

## Categories of Performance Budgeting:

There are four main categories of performance budgeting. They are-

- i. reporting budgeting: It provides performance information as part of the budget i. reporting budgeting: It provides performance information as part of the budget documentation, but budgetary players do not use it for recourse allocation.
- ii. informed budgeting: This is another type of budgeting process that take program ii. informed budgeting: This is another type of budgeting process that take program performance into account, but uses the information only as minor factor in decision making.