government, and fees and receipts for other services rendered by the government. Revenue expenditure is expenditure .. for the normal running of government departments and various services, interest charges on debt incurred by government, subsidies and so on. Broadly speaking, expenditure which does not result in the creation of assets is treated as revenue expenditure. All grants given to state governments and other parties are also treated as revenue expenditure even though some of the grants may be for creation of assets.

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### What is Performance-Based Budgeting?

It is important to understand that performance-based budgeting is not simply the use of program performance information in developing a budget. Performance-based budgeting does more than just inform the resource allocation decisions that go into the development of a traditional type of budget. In other words, it is not just "budgeting based on performance." Instead, it is the process by which a particular type of budget is developed -- a Performance Budget (or "program performance budget"). To design an effective system of performance-based budgeting, it is therefore vital to understand first exactly what the end product itself should be, what it should contain, and how it should look. A true Performance Budget is not simply a Line-Item (or object class) budget with some program goals attached. It tells you much more than just that for a given level of funding a certain level of result is expected. A real Performance Budget gives a meaningful indication of how the dollars are expected to turn into results. Certainly not with scientific precision, but at least in an approximate sense, by outlining a general chain of cause and effect. The most effective governmental Performance Budget does this by showing, for each program area, how dollars fund day-to-day tasks and activities, how these activities are expected to generate certain outputs, and what outcomes should then be the result. A program Performance Budget can be distinguished from a Line-Item Budget in a fundamental way. The line items show what each dollar will be spent on: salaries, benefits, office supplies, travel, utilities, equipment, etc. The Performance Budget shows what each dollar will accomplish, generally in the way of a measurable result achieved (such as a reduction in accidents, an improvement in health, an increase in customer satsifaction, etc.), or in the way of an activity performed (such as process a grant application, inspect a worksite, review a compliance activity,.

## Define Define Performance Budgetin g

Performance data are used during the performance-budgeting process to allocate money for different activities. How a company distributes and uses its people and financial resources largely depends on its budget. From planning and staff development to financial reporting and administrative services, organizations rely on different factors when determining their budgets for the fiscal year. Performance budgeting is one method that organizations use to decide where, how and when budgeting dollars get used. Performance budgeting is a model that is linked directly with financial and organizational results. Metrics that show how expenditures achieve objectives and deliver results are some of the primary characteristics of performance budgeting. Organizations apply performance budgeting in different ways, depending on their sector, customer base or constituency and their overall objectives. For example, a governmental agency may use its budget to reduce waste, while a university may wish to increase its attendance rates.