Mid Term Appraisal & Types of Budget.pptx

MID TERM APPRAISAL
AND
TYPES OF BUDGET
SUBMITTED BY
Ms. Jyoti Chand
MSc Nursing
6/15/2024 1

MID TERM APPRAISAL
The Mid Term Appraisal (MTA) reviews the experience in the first three
years or midterm of the plan. Its main objective is to identify areas requiring
corrective steps.
It provides an opportunity for economic status and to introduce policy
correctives and new initiatives in critical areas in the context of the new
priorities. It monitors the progress made in utilizing available resources.
It is an assessment of the resources position facing both the center and
states and the implications.
6/15/2024 2

An Overview of Mid Term Appraisal of the Eleventh Plan (2007-08 to 2011-12)
The Mid Term Appraisal reveals that the economy has weathered an
exceptionally difficult global environment very well and is now well poised
to return to 9% growth by the terminal year of the Eleventh Plan.
1. Promotion of large number of programme, e.g. NRHM, ICDS, which are
aimed at the weaker section are being identified during monitoring and
evaluation and these need to be addressed through mid-course correction.
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Cont…
2. Malnutrition among children is another area that needs mid-term
appraisal, where progress is too slow.
3. The improvement in the implementation of social sector programmes
which are sponsored by central government requires special attention.
6/15/2024 4

Budget
Budget is a plan that uses numerical data to predict that activities of an
organization over a period of time.
-Bessie
Budgeting is an operational plan, for a definite period usually a year-
expressed in financial terms and based on the expected income and
expenditure.
6/15/2024 5

FEATURES OF BUDGET
1. Budget should be flexible.
2. It should be synthesis of past, present and future.
3. It should be product of joint venture with cooperation of executives/department heads at
different levels of management.
4. It should be in the form of statistical standard laid down in specific numerical terms.
5. It should have support of top management through-out the period of its planning and
supplementation.
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TYPES OF BUDGETING
1) Plan and Non plan Budgeting
2) Zero based budgeting
3) Capital Budgeting
4) Revenue Budgeting
5) Personnel Budget
6) Strategic Planning budget
7) Roll over Budget
6/15/2024 7

Plan Budget
The organizational objective, mission, vision and policies are reviewed
before the commencement of the next financial year. The entire expenditure
is forecasted in terms of input and output of the organization.
A plan budget is a forecasted budget. This budget is usually made for
attaining an idea of expenditure in different areas of functioning. Planned
budget is used in planning the entire budget of a nation as it forecasts the
entire need of the nation for the next financial year.
6/15/2024 8

Non Plan budget
A Non planned budget is prepared immediately after the crisis occurs and
there will be an administrative level meeting, in which a proposal of budget
to meet the crisis is made.
e.g. Non plan budget was the budget prepared after the occurrence of wars,
natural calamities like floods, volcanic eruptions etc. which is happen
sudden and unexpectedly.
6/15/2024 9

Zero- Based Budgeting
Zero-based budgeting (ZBB) was adopted in India in 1986 as a technique for
determining expenditure budgets. Aaccordingly, the Ministry of Finance
instructed all the administrative ministries to review their respective
programs and activities to prepare expenditure budget estimates based on
the principles of zero-based budgeting.
6/15/2024 10

Meaning
•Zero-based budgeting is a type of budget starting from the zero base every fiscal
year. The managers need to submit detailed expenses of the approved budget with
justification and start from scratch.
• Zero-based budgeting is a method of planning and decision-making which reverses
the working process of traditional budgeting.
•Each department reviews budget comprehensively to seek approval for all
expenditures.
6/15/2024 11

Features
 It focuses on identifying and prioritizing activities according to its
importance/need.
 It needs to evaluate all possible alternative sources of fund.
 The estimation of expenses should be on cost-benefit analysis.
 The method is action oriented and dynamic.
 It works on the range of possibilities on cost reduction.
6/15/2024 12

Advantages
 It forces the managers to plan each program package afresh.
 It avoids the prevailing tendency in the budgeting of looking at changes
from a previous period.
 It allocates resources per needs and benefits.
 It includes cost-effective ways to improve operations.
6/15/2024 13

Cont…
 It is useful in departments that were challenging to identify the output.
 It enhances staff motivation by providing higher initiative and responsibility in
decision-making.
 It improves communication and coordination within the organization.
 It tries to identify and eliminate wasteful and obsolete operations.
6/15/2024 14

Disadvantages
 It is challenging to define decision units and decision packages.
 The process is time consuming and exhaustive.
 It forces us to justify every detail related to expenditure.
 It is comparatively expensive than traditional method as more skilled persons
are required.
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Cont…
 It requires more administrative staff to prepare and deal with zero budgeting
process. The honesty of the managers must be reliable and uniform.
 Sometimes, overburden may demotivate employees.
6/15/2024 16

Capital Budgeting
Capital budgets are related to long- range planning. Capital expenditure include,
physical changes such as replacement or expansion of the plant, major equipment and
inventories. These items are usually major investments and reduce the flexibility in
budgeting because it takes a long time to recover the costs.
For instance, a patient may be charged per treatment or per day for use of equipment, but
it may take many months or even years to recover the cost of the equipment. The
hospital administrator usually establishes the ceiling for capital expenses.
6/15/2024 17

Operating Budget:
It provides an overview of an organizations function by projecting the planned
operations usually for the upcoming year.
The operating budget reflects the expenses that change in response to the volume
of service such as cost of electricity, repairs and maintenance supplies. Effective
nurse managers must be alert to the types and quantities of supplies used in their
unit.
6/15/2024 18

Performance Budgeting
It is a system of presenting both inputs of resources and output of services of an
organization and units. The revenue and expenditure reflected in functions, programs,
performance units, primarily the output, and its cost. The funds and resources are
allocated to specific goals.
 It emphasizes accountability efficiently and economy by highlighting outcomes.
The main goal is to find out and measure relative performance to achieve goal for a
specified result.
6/15/2024 19

Features
 The budget must indicate purpose and objectives for getting funds.
 It must also show the cost and output of each program and program activity.
 Each activity/program based on cost-benefit analysis regardless of fund allocation.
 It uses management tools such as work measurement, benchmarking, and cost cutting.
 It is applicable for long-term plans.
6/15/2024 20

Cont…
 It has performance criteria/standards.
 It requires a lot of effort in formulating objectives, identifying programs based
on cost-benefit analysis, developing targets, performance indicators/criteria,
method of assessing performance with planned performance budget, etc.
6/15/2024 21

Preparation of Performance budget
1. Allocation of resources:
Submit the requirements per program classification. Indicate its past activities,
their costs, the activities to be taken up during next year, the results expected, a
pattern of assignment of responsibilities, or time-phased plan for expenditure and
work.
6/15/2024 22

Cont…
2. Budget execution: Initiate the action for implementation after getting the
grants. Monitor the activities and regulate the flow of expenditure. Prepare the
time-phased reports showing investment and work and keep a record.
3. Appraisal and evaluation: Evaluate each program in the light of results
obtained and expenditure incurred.
6/15/2024 23

Advantages
 It allocates the funds on the expected performance cost.
 The method aims at improving the performance.
 It is a very objective method based on cost-effective analysis.
 Each program evaluated based on criteria and indicators.
 The outcome weighs against budgeted performance.
6/15/2024 24

Disadvantages
 There is a possibility of inaccuracy in forecasting and expenses.
 It measures the results quantitatively.
 It needs a proper accounting, monitoring, and reporting system.
 It is difficult to measure the social benefit of functions.
6/15/2024 25

Cont…
 The process is time consuming and expensive.
 Due to its flexibility feature, programs may change at the time of
implementation. It requires more skilled man hours to plan and implement the
process.
6/15/2024 26

Personnel Budget:
Personnel budget estimate the cost of direct labor necessary to meet the agency’s
objectives. It determines the recruitment, hiring, assignment, layoff and discharge
of personnel. The current staffing patterns, number of unfilled positions, and last
year’s report can provide a base. The nurse manager decides on the type of
nursing care necessary to meet the nursing needs of the estimated patient
population.
6/15/2024 27

Strategic planning Budget:
Long range budgets for long range planning are often called the agency’s
strategic plan and are usually projected for 3-5 years. Program budgets are part of
strategic plan that focuses on all the benefits and costs associated with a
particular program.
6/15/2024 28

Rollover Budget
Rollover budget is one that forecasts program, revenues and expenses for a
period greater than a year, to accommodate program that are larger than annual
budget cycle.
6/15/2024 29

Application of Research
Health budget in light of pandemic: Health reforms from mirage to reality
Author: Bhavna Jain , Suneela Garg
The outbreak of coronavirus disease (COVID-19) has triggered changes and
reforms in the health sector in India. As the pandemic points to a gap in the
industry, it has led to the creation of new opportunities to solve problems.
6/15/2024 30

To help the country repair the damage caused by the virus pandemic, the Government of India
announced that in the health budget 2021, promotion of health and well-being will be one of the
six pillars. Investment in health infrastructure in the 2021 budget has increased significantly to
welcome the much-needed increase in budget allocations of Rs. 2.3 lakh crore.
Three areas will also be strengthened, including preventive health care and therapeutic health
care. Special emphasis is placed on prevention, treatment, and health care. To promote primary
health care, the country will establish 17,000 rural and 11,000 urban health care centers.
6/15/2024 31

Budgeting is a process of allocation of scarce resources based on forecast needs
for proposed activities over some time. The budget is a plan for an estimate of
future needs arranged according to an orderly basis, covering all the activities of
an enterprise for a defined period. Budgeting is classified according to its
methodology used to prepare budget. The many different types of budgeting are
plan and non - plan budgeting, zero based budgeting, capital and revenue
budgeting.
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Conclusion:
Budgeting is a process of allocation of scarce resources based on forecast needs
for proposed activities over some time. The budget is a plan for an estimate of
future needs arranged according to an orderly basis, covering all the activities of
an enterprise for a defined period. Budgeting is classified according to its
methodology used to prepare budget. The many different types of budgeting are
plan and non - plan budgeting, zero based budgeting, capital and revenue
budgeting.
6/15/2024 33

References
 Vati. J. Principles and Practice of Nursing Management and Administration. Haryana: Jaypee
Brother and Sons: pg no 343-49
 Laxmikanth. M. “Public Administration”. Chennai: MC Graw Hill; 2022; pg no- 8.1- 8.36
 Roussel. L “Management and leadership for Nurse Administrators” Jones & Bartlett
Publications. Ltd. 5th Edition Haryana; pg no- 368-406
 Krishnan V. Textbook of management of nursing services and education, SAS nagar; vision
health sciences publishers; 2021; pg no- 69-87
 Jain B, Garg S, Aggarwal P, Bahurupi Y, Singh M, Kumar R. Health budget in light of
pandemic: Health reforms from mirage to reality. J Family Med Prim Care 2022; 11:1-4
6/15/2024 34

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