New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    Which country pioneered the implementation of zero-based

    budgeting?
    A India Correct Answer Incorrect Answer
    B Germany Correct Answer Incorrect Answer
    C The US Correct Answer Incorrect Answer
    D The UK Correct Answer Incorrect Answer

    Solution

    Zero-based budgeting (ZBB) was first developed and implemented in the United States during the 1970s. Peter Pyhrr, a manager at Texas Instruments, is credited with developing this innovative budgeting approach, which was subsequently adopted at the federal level during President Jimmy Carter's administration as part of his comprehensive government budgeting reforms. Unlike traditional incremental budgeting that builds upon previous allocations, zero-based budgeting requires departments to justify every expenditure from zero for each new budget cycle, regardless of previous allocations. This methodology demands that all expenses be evaluated and justified based on necessity and alignment with organizational objectives, rather than merely explaining increases from prior budgets. This approach promotes greater fiscal discipline and resource optimization by requiring thorough evaluation of all expenditures.

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