- March 4, 2021
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Context: Jharkhand presented its first outcome budget yesterday.
- Over the year’s performance budget was seen as following output, rather than outcomes (Budget speech of 2005-06 highlighted this).
- Outcome budgeting lays emphasis on linkages between money allocated (outlay) and the outcomes (and not just outputs).
- It shifts the focus to the short and long-term outcomes of governance
- The outcomes are not just in Rupee terms, but in actual unit achieved (Ex- Actual KMS of road laid) and qualitative target it helped achieved.
- Outcome Budget was first introduced in India in 2005-06.
- From the 2006-07 financial year, every ministry handling a sector presents a preliminary outcome budget to the Ministry of Finance, which is responsible for compiling them
Understanding outlay, output and outcome
- Outlays are financial resources deployed for achieving certain outcomes.
- Outputs are a measure of the physical quantity of the goods or services produced through a government scheme or programme. They are usually an intermediate stage between ‘outlays’ and ‘outcomes. For example, construction of a health care centre is the ‘output’, while increase in the literacy rate is the ‘final outcome’ or ‘impact’.
- Outcomes or impact are the end results of various government initiatives. Going beyond mere ‘outputs’, they cover the quality and effectiveness of the goods or services.