PLANNING PROGRAMMING

BUDGETING SYSTEM (PPBS)

By- DEVENDER (200637)

MADHU YADAV (200638)
MANISHA YADAV (200640)
 Origin of PPBS
PPBS was first introduced
in the Defense Department
in the USA in 1961 by
Robert McNamara, and in
all departments in 1965
until 1975.
 Introduction
PPBS is a new management tool. It can provide powerful
assistance to a decision maker by displaying enterprise goals
and alternative means of achieving them, including both the oenefits and
costs of each alternative. Given that resources
are limited, PPBS can lead to their more effective allocation
and management.
 Purpose of PPBS
• The purpose of PPBS is to integrate the planning,programming,
and budgeting functions of an enterprise into a formal system.
• PPBS is based upon three fundamental ideas. These are the
concepts of a goal, a program, and effectiveness.
 PPBS STEPS
1. Planning
2. Programming
3. Budgeting
4. Operations
5. Evaluation
 Planning
Planning is an analytical activity carried
out to aid in the selection of the
organizations objectives and then to
examine courses of action that could be
taken in the pursuit of the objectives.
Planning, in effect, poses the question of
whether some particular course of action
would contribute more to the attainment of
the organization’s goal than its various
alternatives.
 Programming
Programming is the function
that converts plans into a
specific action schedule for
the organization.
Programming consists of
developing detailed resource
requirements and the actions
needed to implement plans.
 Budgeting
Budgeting is the activity
concerned with the preparation
and justification of the
organization’s annual budget.
The function of budgeting is to
secure sufficient funds to put the
program into operation.
 Operations
Operations consists of the
actual carrying out of the
organization’s programs.
Preparing for operations is
the object of all the other
phases.
 Evaluation
Evaluation is the function that
evaluates the worth of operating
programs. Through program
evaluation the worth of programs
in attaining goals is measured
and appraised. The result of
evaluations is used to modify
current operations, if indicated,
or in planning future programs.
 Stages of Planning Programming
Budgeting System
• Specification of Objectives – The objectives of the
programmes are to be specified in consistence with the long
term goals in quantitative terms as far as possible.
• Systemic Analysis – The possible alternative projects to
achieve the programme objectives are analyzed in a
systematic way with the use of cost-benefit and cost-
effectiveness analysis.
• Functional Classification - The budget is classified on a
functional basis like functions, programmes, projects and
activities.

• Organization – Budget formulation addresses the

organizational structure, managerial and administrative
procedures of the programs/ projects/ activities.

• Evaluation – The mechanism for evaluation of performance

on the basis of financial and physical performances to
monitor, and take corrective actions, if necessary.
 Advantages of Planning Programming
Budgeting System
It integrates the process of program/ project formulation, budget allocation and evaluation in a
systematic way.
It helps in the choice of programs/ projects, allocation of resources on them and performance
evaluation for the executive and legislature.
It integrates the decision makings regarding the choice of program/ projects to achieve the intended
objectives.
It attempts to promote maximum social advantage with the prudent (wise-full) use of scarce resources.
1. It incorporates the future budgetary repercussion (may be 3,5,10 years) as per the nature and size
of the projects.
 Limitations of Planning Programming
Budgeting System
For appropriation and control purposes, expenditures are continued to be classified in the
traditional line-item approach. Various objectives budgetary policy makes budgeting complex
and confusing.
The problem arises in its application in case of multiple objectives of a program/ project that
involves different agencies.
It is difficult to acquire necessary information regarding performance evaluation and cost
estimation in an uniform way in all governmental activities.
It emphasizes on physical and financial performance, not on qualitative performance.
1. It intends to centralize the budgetary decision makings.
 Reference
Brown, Timothy A. “Planning-Programming-Budgeting System (PPBS): Implications for
Library Management (Book Review).” College & Research Libraries, vol. 35, no. 3, May
1974, pp. 215–16. DOI.org (Crossref), doi:10.5860/crl_35_03_215_A.
“Management Studies: Planning Programming Budgeting System (PPBS).” Management
Studies,
https://analysisproject.blogspot.com/2017/02/planning-programming-budgeting-system.html.
Accessed 3 June 2021.
1. Think, Ready to. “Planning Programming Budgeting System (PPBS).” Ready To Think, 1
Jan. 2018, http://www.readytothink.net/management_consulting/work-plan-vision-goals-
objectives/planning-programming-budgeting-system-ppbs/
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