Question

Understanding that government is a very reactive service provider (response provided when a call for service is delivered for a police call, fire incident, etc.) discuss the obstacles that confront government when developing performance measurements for use in performance budgeting. describe in 2-3 pages.

Answer 1

As the government is the prime and ultimate social service provider, so the quantum of the services provided to the society is countless whereas the resources are always limited.

So, while measuring the performance of the government activities and use that as performance budgeting figures, there exists many restrictions and obstacles towards measuring the same. These obstacles can be summarized as :

1. Non-productive services: Government has to perform many services which are non-productive one and not undertaken by any other part of the society like safety in the form of police, fire-fighting, hospitals, etc. The cost estimation on all these services is not easy to calculate and quantify. Because of many casualties and unexpected incidences, the services provided is count-less and cost is going to be immense.
2. Infrastructures and estiblishments : The government has to provide for all heavy expenditures projects which is not undertaken by any other person or concern of the society because of uncertainty of revenues and loss-making social activities like creating infrastructures like roads, electricity, water, communication, etc. Putting up of electricity and water plant takes huge time and investment and the return on these investments is also uncertain, so no other part of the society is interested in undertaking the same. Various non-productive establishments are to be raised to do operations / administration works like Income tax offices, complaint offices, etc.
3. Uncertainty of revenues : The revenue generation of the government is also very uncertain and mis-leading. The revenues being budgeted are never be true and certain to be achieved. Thus, it lead to deficit financing where government has to borrow on the reserves it has and by degrading its currency from international sources. This action will lead to restrictions on the development path of the government.
4. Casualties like earth quicks and floods : The happening of the casualties like earthquicks and floods will lead to heavy expenditures and diversion of the services from other parts / activities of the society. Being government being the prime source of help in all these cases, so it is not possible for government to put restrictions on the expenditures, services and the diversions of services.
5. Maintaining international treaties : The government has to fulfil the international obligations like international treaties and MOU’s so signed. This will restrict the activities and revenues of the government while going for fulfilling these assignments. The international activities will also bring the growth in the nation through foreign investments so government officials has to do expenditures to motivate and educate the foreign investors to take up investment in the concerned country.
6. No alternatives : As under the performance budgeting of the government activities, there is no other option or alternative, so getting informations and data from sources may delay the proceedings. This restrictions also make the drawing the performance budgetary activities meaningless, so this point is also a big obstacle in government activities measurement for performance budget.

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