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capital budjeting

capital budjeting

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Published by tulasinad123
capital budjeting
capital budjeting

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Published by: tulasinad123 on Mar 16, 2011
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The budgetary control system is not a perfect tool. It has its own

limitations, which are as follows:

i. Opposition against the very spirit of budgeting

There will be always active and passive resistance to budgetary control as it

points efficiency or inefficiency of individuals. The opposition is due to human nature- the

tendency to resist change.

ii. Budgeting and changing economy

The preparation of a budget, which gives a realistic position of the firm's affairs

under inflationary pressure and changing government, is very difficult. Thus, the accurate

position of the business cannot estimate.

iii. Time factor

Accuracy in budgeting comes through experience. Management must not expect too

much expect too much during the development period.

iv. Not a substitute for management


Budget is only a management tool. It cannot substitute management. Besides that no

budgetary programmer can be successful unless adequate arrangements are made for

supervision and administration.

v. Co-operation required

The success of the budgetary control depends upon willing cooperation and

teamwork. Budget officer must have co-operation from all department managers. These

managers must feel the responsibility for achieving departmental goals laid down in the





Under article 226 of the Constitution of India, a Consolidated Fund is defined as

reservoir to which all the government earnings flow (credited) and from which the

expenditure of government when so authorized by the parliament is made (debited).

Central government is having consolidated fund of India.

Authorized Expenditure (Appropriation Bills)

Under the article 114(1) of Indian constitution, after the budget is voted by the

parliament and appropriations sanctioned by the president, an appropriation bill is passed.

It becomes appropriation act and this act authorizes government to withdraw money from

consolidated fund of India-to the extent sanctioned for incurring expenditure. It should

borne in mind that though the expenditure is voted by the parliament and the appropriation

sanctioned by the president.

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