Question

Q1)Budgeting is an exercise in futility. Discuss? and how is budget tracking executed .

20 Marks

Answer 1

The exercise of presenting a budget was first done in the context of economic and credibility problem. Lets start with the statement of fiscal operations and the confidence of the people.The numbers presented in the budget are merely intended and not real. Rarely (if ever) do the real fiscal operations over the year mirror the intended numbers exactly. And the reasons for this range from the political to the purely economic. Those who govern have their own priorities, and sticking to intended fiscal plans is not one of them. One would be hard pressed to find the Rs450 billion paid to he IPPs in any budgetary statement. In essence, priorities like these are not the outcome of some fiscal prudence, but rather a reflection of a political intent.

It will be pertinent to mention here that before the arrival of the budget, Goods of day to day use disappear from the market. The shop keeper will say that the budget is coming. As the price level shoots up to new highs people are more misery than before. Thus the arrival of the budget serves as a convinient excuse for hoarders to hoard commodities of daily use.

In Conclusion, The whole exercise of preparing and presenting annual budgets constitutes wastage of resources. Instead of presenting plans for the future, which is always too uncertain, why not just go for on-demand utilisation of resources through prioritising tasks?