PMF IAS Current Affairs
PMF IAS Current Affairs
  • Prioritising SDG goals will help India tackle several emerging challenges, like the impacts of climate change, increasing inequities, and lagging human development indices.
  • Timely access to sufficient financial resources is important for achieving SDG. So, it is important to have outcome-oriented budgeting in the country.
  • Assam’s utilisation of Outcome-Based Strategies (OBS) aligned with SDG outcomes serves as a noteworthy example.

What is outcome-oriented budgeting?

  • It is a way of planning and managing money where the focus is on achieving specific results or outcomes rather than just spending money on various activities.
  • It helps ensure that resources are used efficiently to achieve the intended goals and bring about positive changes in society.
  • Fundamental to understanding this type of budgeting is the difference between outputs and outcomes:
    • Outputs are the goods and services that governments produce or provide.
    • Outcomes are the impact or consequences of the outputs for the community. E.g, Swachh Bharat Abhiyan.
    • Outputs: Construction of a specific number of toilets.
    • Outcomes: Improved public health due to reduced open defecation.
  • Outcomes of programmes are measured not just in terms of rupees but also in terms of physical units like kilowatts of energy or tonnes.
  • Also, outcomes are expressed in terms of qualitative targets and achievements to make the technique more comprehensive.

    Outcome based budgeting

Procedure of outcome-based budgeting

  • The concept of outcome budgeting was introduced in India in 2005.
  • Under outcome budgeting, each Ministry presents a preliminary Outcome Budget to the Finance Ministry, which is responsible for compiling them.
  • The Outcome Budget becomes a progress card on what various Ministries and Departments have done with the outlays in the previous annual budget.
  • From 2007-08 onwards, the previous Performance Budget was merged with the Outcome Budget.
  • Around 11 Indian states have started following the practice of formulating their OBSs in the past few years.


  • Better service delivery.
  • Effective Decision-making.
  • Evaluation of programme performance and results.
  • Communicating programme goals.
  • Improving programme effectiveness.
  • Make budgets cost-effective.
  • Fix accountability.
  • Aid better scheme management.


  • Lack of political ownership.
  • Linking funds with performance may result in additional costs.
  • Cultural change is required in central agencies to move from compliance-based management to outcome-based management.
  • The process of identifying outcomes may become problematic.
  • Unpreparedness for the enhanced accountability in government agencies.
  • Poor accounting and IT systems that don’t support the reform.
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