Which country first introduced zero-based budgeting?

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SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 10 Aug, 2023 Shift 1)
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  1. India
  2. Germany
  3. The US
  4. The UK

Answer (Detailed Solution Below)

Option 3 : The US
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SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 02 Aug 2023 Shift 1)
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Detailed Solution

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The correct answer is The US.Key Points

  • The US first introduced zero-based budgeting in the 1960s.
  • In the 1960s, ZBB was formally initiated in the Department of Agriculture of the USA and turned out to be more popular in the 1970s.
  • The Zero-Based Budgeting applicable today was developed at Texas Instruments Inc. in 1969 by Peter Pyhrr.
  • Zero-based budgeting is a budgeting method in which all expenses must be justified for each new period.
  • It starts from a "zero base" and every function within an organization is analyzed for its needs and costs.

Additional Information

  • India did adopt zero-based budgeting in 1987, but it was not the first country to do so.
  • Germany and the UK have also implemented zero-based budgeting, but again, they were not the first countries to introduce this method.
  • Zero-based budgeting is often used by businesses and governments to identify areas of inefficiency and to reduce unnecessary expenses.
  • There are two techniques for tracking expenses: zero-based budgeting and traditional budgeting.
  • Zero-based budgeting aids managers in addressing a company's lowest costs.
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