Zero Based Budgeting in ISRO

Zero Based Budgeting: A critical analysis on budgeting practice of ISRO Satellite Centre (ISAC)
2013
We might come closer to balancing the Budget if all of us lived closer to the Commandments and the Golden Rule. -Ronald Reagan
1.
INTRODUCTION
The Indian Space Research Organization (ISRO), have been making news for all the good reasons for many of its recent successful lunch of satellites which was celebrating its Ruby year on 10th of May 2012 with a remarkable journey of 40 years into the time space of space science and its allied technology and also reaching a milestone of 100 th space mission PSLV -C21 (Space Research Today, 2012). Space activities commenced in India in 1963 when the Thumba Equatorial Rocket Launching Station (TERLS) was set up under the stewardship of Vikram A.Sarabhai, the acknowledged father of the Indian space programme (ISRO, 2012). Initially the programme was carried out by the Department of Atomic Energy through the Indian National Committee for Space Research, which was reconstituted in 1962 for that specific purpose and subsequently transformed into the Indian Space Research Organization (ISRO). ISRO was charged with the explicit mandate to promote the development and application of space technology and space science for the socio-economic benefit of the nation (Ranjana Kaul and Ram S. Jakhu, 2010) Recognizing the critical importance of outer space as a tool for accelerating the sustainable development of the country, successive Governments have made significant financial allocations to the Department of Space (DOS) and to the ISRO for the implementation of specific programmes. The Indian Space Programme, over the years,
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has paved the way for creating cost-effective space infrastructure for the country in a self-reliant manner and the economic and social benefits brought in by the application of space technology to the national development have been significant. The Space Programme is poised to play a pivotal role in the national development in the coming years. Although ISRO carries many successful titles in its belt, it works with a stringent budget. To compare with that of NASA ISRO gets only about 3% of NASA annual budget (Dr K Radha Krishnan, 2010). While in the financial year the budget of ISRO was raised to $1.45 billion from $1.13 billion, the budget that of NASA was reduced to $18.448 billion from 18,724 billion (Space News, 2011).This amplifies the need of proper budget management marking the financial goals that are to be achieved and acting as a yardstick for past performance. In this research importance will be given over the study of Zero based budget, its implications with respect to ISRO Satellite Centre and its influence towards other factors that governs the financial spending. This research will be carried through investigating the pervious budgets of ISRO and their follow-ups. It will be done through carrying out a qualitative assessment through different approaches in collecting data, such as the grounded theory practice, action research or actor-network theory. Forms of the data collected can include interviews and group discussions, observation and reflection field notes, various texts, pictures, and other materials.
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1.1.
Rationale for the Investigation
In 1968 an article by Peter Phyrr titled Zero-base budgeting (Phyrr P, 1970) generated a great deal of interest and prompted him to expand his concept in much greater detail in a book titled Zero-Base Budgeting (ZBB) (published in 1973 (Phyrr P, 1973). Since that time, there has been a good deal of experimenting and actual implementation of ZBB in the public sector of Indian economy. In India the government has encouraged adoption of the concept in the in several public sectors and state governments have adopted ZBB to greater or lesser degrees; Local governments, including county, city, school and hospital districts have accepted or are considering ZBB as an alternative to their current budget procedure(Singh, G.; Yadav P, 2011). The business oriented press has touted the concept as the wave of the future in budgeting (William L. Boyd 1980). A plethora of articles and news releases have appeared in the various trade journals. In the last few years, zero-base budgeting has received much acclaim but little actual evaluation. Although the practice of ZBB is slowly getting in its phase, the lack of research in the field zero based budgeting have created a void in understanding and henceforth the implementation of it in vast area of budget practice (Singh, G.; Yadav P, 2011). The purpose of this article is to review the findings of various empirical studies concerned with the applicability of zero-base budgeting in the public sector of Indian economy, with respect to ISRO/ISAC. A comment follows the review concerning the need for a rational and systematic approach to the problems of budgeting. To analysis the functional areas of ISAC it will be important to know ISROs functional areas which will be explained in this next section of this chapter.
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1.2.
Outline
Chapter 1 Introduction of the study This chapter gives a brief detail on the background of the firm where the research will be carried and also elaborate the needs, of the thesis. The literature review lays the theoretical foundation on which the research will be carried. It provides evidence with help of previous carried works to support the argument. Further research and also holds the explanation of various terms pointing their importance in the research. This chapter will represent major theories of budgeting, zero based budgeting and other related literature works. Chapter 2: Industry Profile: This chapter gives the Introduction to ISRO/ISAC, its area of professional. Also the company profile: a. A brief history of the ISRO. b. Year of establishment. Initial investment, founders profile. Locations of ISRO group organizations, nature of initial business of the group. & past business performance c. Present position of the company/business group in terms of total investment, type/nature of businesses, total turnover, total number of employees, product profile, subsidiary companies under the same management, collaboration/joint ventures, performance as the major science and development organization in the country, and certifications/achievements/awards won. Chapter 3 Research Methodology This chapter describes the methodology that was used to progress and authorise the aims and objectives of this research. The research method implemented for this research comprises the research design, selection of samples, data collection methods and the data analysis procedures.
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Chapter 4- Data analysis and results This chapter contains the outcomes and discoveries of the primary research carried through the qualitative research. These findings originate from the data of budgeting that will be given by ISAC for research purpose. It also provides a summary of key findings in an organized format. Chapter 5- Summary of findings This chapter lures together the findings of chapter 2 and 4. The theoretical implications of the research are discussed in this chapter relating the primary findings that is profound to heighten the structure of the research and its tenacity. Lastly an all-inclusive analysis of the collected data is presented and summarized. Chapter 6 Conclusions and Recommendations This chapter winds up the research by drawing conclusions on the aspects of zero based budgeting, financial management with concerning to ISAC.
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1.3.
Literature Review
1.3.1. Budget
Firstly, a discussion on this topic with a simple definition of budget will be given. In short, budget can be defined as a quantitative economic plan made with regard to time. Therefore, for something to be characterised as a budget it must comprise the quantities of economic resources to be allocated and used, it has to be expressed in economic i.e. monetary terms, it has to be a plan not a hope or a forecast but an authoritative intention, and it must be made within a certain period of time (Harper, 1995, p. 318). Only a plan that has such characteristics can be called a budget. However, if a budget is looked upon in its wider context, it can be defined as a management tool that puts executives in control of the financial health of their company. It is an objective measure of the financial structure of companys operation and a tool that forces management to be accountable in a structured and objective way. Budgets as management tools by themselves are neither good nor bad. How managers administer budgets is the key to their value. When administered wisely, budgets facilitate planning and resource allocation and help to enumerate, itemize, dissect and examine all of the products and services that a company offers to customers (Seer, 2000, p. 187). In short and taken at its simplest level, a budget is a mathematical exercise, but in reality it is much, much more than numbers on spread sheets, which is what following text will definitely show.
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1.3.2. History of budget

The English word budget stems from the French word bougette and the Latin word bulga which was a leather bag or a large-sized purse which travellers in medieval times hung on the saddle of their horse. The treasurers bougette was the predecessor to the small leather case from which finance ministries even today in countries like Great Britain and Holland present their yearly financial plan for the state. So after being used to describe the word wallet and then state finances, the meaning of the word budget in 19th century slowly shifted to the financial plan itself, initially only for governments and then later for private and legal entities (Hofstede, 1968, p. 19). It was only then that budgets started to be considered as financial plans and not just as money bags. The use of budgets as financial planning and control tools for business enterprises is historically a rather young phenomenon. In the US, early budgetary principles in companies were mostly derived from the budget techniques in government. The other source of budgetary principles for business in the US was the Scientific Management Movement, which in the years between 1911 and 1935 conquered the US industry. Many historians agree that early budgeting systems can be seen as a logical extension of Taylors Scientific Management from the shop floor to the total enterprise. Howev er, it was not until the depression years after 1930 that budget control in US companies started to be implemented on a large-scale. Budgets with their focus on cost control simply became a perfect management tool for that period of time (ibid., p. 20). In Europe the idea of using budgets for business was firstly formulated by the French organization pioneer Henri Fayol (1841-1925). There was, however, little application in practice. Another practical stimulus came from the ideas of the Czech entrepreneur Thomas Bata (1876-1925) who introduced the so-called departmental profit-and loss- control as a tool
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for decentralizing his international shoe company into a federation of independently run small businesses. Nevertheless, the main inducement for the development of budgets and their implementation in European companies came from across the Atlantic in the years following the Second World War (ibid., p. 21). Companies like Du Pont and General Motors in the U.S., Siemens in Germany, and Saint Gobain and Elctricit de France in France, which pioneered the M-form (multidivisional) organizational structure in the 1920's, first started to use budgets to support their rapid growth as they expanded into new products and markets. This was to help them to reduce the complexity of managing multiple strategies (Hope, Fraser, 1997, p. 20). The enormous diversity in the product markets served by these vertically integrated corporations required new systems and measures to coordinate dispersed and decentralized activities. In this kind of environment, budgets and ROI measure rightly played a key role in permitting central management to coordinate, motivate and evaluate the performance of their divisional managers, and perform a proper allocation of internal capital and resources (Johnson, Kaplan, 1991, p. 11). However, it is was only in the 1960's that accountants started adding to budgets other functions (like management performance evaluation and motivation) in addition to those functions for which they had originally been devised planning and control (Hope, Fraser, 1999b, p. 50). In that period, budgets became the central and most important activity within management accounting or in the words of Horngren, Foster and Datar: the most widely used accounting tool for planning and controlling organizations (2000, p. 178). This is exactly how budgets have remained to this day. The only thing that has changed in the meantime is the competitive environment in which todays companies operate and which has provoked many discussions about budgets disadvantages and their alternatives, some of which will be presented in later parts of this thesis.
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1.3.3. Type of budget

A budget is not a unitary concept but varies from organization to organization. The basic concept of budgeting involves estimating future performance, comparing actual results with the estimate, and analysing the differences between them. Factors that are relevant in determining the type or style of an organizations budget and its effects include: the type of organization, the leadership style, personalities of people affected by the budget, the method of preparation, and the desired results of the budgeting process (Cherrington, Cherrington, 1973, p. 226). In general, budgets can be classified into two primary categories (Cohen, Robbins, Young, 1994, p. 171): 1) Operating budgets Operating budgets consist of plans for all those activities that make up the normal operations of the firm. The main components of the firms operating budget include sales, production, inventory, materials, labour, overheads and R&D budgets. 2) Financial budgets Financial budgets are used to control the financial aspects of the business. In effect, these budgets reveal the influence of the operating budgets on the firms financial position and earnings potential. They include a cash budget, capital expenditures budget and pro forma balance sheet and income statement. In figure 1, all major budgets that can be used in a typical company and how they are linked and interconnected within the larger system of the master budget can be seen. This confirms what has already been said about the budgeting process that individual budgets are dependent on one another which requires that they be prepared in a hierarchical manner.
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Figure 1: All types of budgets involved in a typical organization
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Except for the usual division of companies budgets into operational and financial, budgets can also be differentiated based on expenditure authority. Using this approach, two major groups of budgets can be defined (Kemp, Dunbar, 2003, p. 3): a) Line-item budgets These are budgets where the name of each line is set, as is the amount of money that can be spent on each item. If one works within a line-item budget, one cannot overspend a specific line item and then compensate this with savings on other line (or vice versa). The authority to move money from one line item to another must be granted at a higher level. b) Block budgets These are the opposites of line-item budgets. Here a block of money is given. The details of the budget are presented but, later on, if one wants to spend more money on one item and less on another, one is free to do so. As long as the block of money is not overspent before the end of the year, the budget remains under control
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1.3.4. Budgeting
Budgeting may be defined quite simply as the process of compiling budgets and subsequently adhering to them as closely as possible (Maitland, 2000, p. 1). It is a process that turns managers perspectives forward. Thereby, looking to the future and planning, managers are able to anticipate and correct potential problems before they arise. This system allows managers to focus on exploiting opportunities instead of, figuratively speaking, and fighting fires. In this way the system provides sustainability to business processes within the company. It is a process of the utmost importance to management. In the words of one observer; few businesses plan to fail, but many of those that collapse failed to plan (Horngren, Foster, Datar, 2000, p. 178). The purpose of budgeting is that it gives management an idea of how well a company is meeting their income goals, whether or not expenses are in line with predicted levels, and how well controls are working. Properly used, budgeting can and should increase profits, reduce unnecessary spending, and clearly define how immediate steps can be taken to expand markets (Thomsett, 1988, p. 5). In order to achieve this, management needs to build a budgeting system, the major objectives of which are to (Viscione, 1984, p. 42): 1. Set acceptable targets for revenues and expenses. 2. Increase the likelihood that targets will be reached. 3. Provide time and opportunity to formulate and evaluate options should obstacles arise. Since budgeting as a process is very complex, it comes as no surprise that budgets are trying to fulfil numerous functions such as (Harper, 1995, p. 321, and Churchill, 1984, p. 162):
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a) Planning a budget establishes a plan of action that enables management to know in advance the amounts and timing of the production factors required to meet desired levels of sales. b) Controlling a budget can be used to help an organization reach its objectives by ensuring that each of the individual steps are taken as planned. c) Coordinating a budget is where all the financial components of an organization individual units, divisions, and departments - are assembled into a coherent master picture that expresses the organizations overall operational objectives and strategic goals. d) Communicating by publishing the budget, management explicitly informs its subordinates as to what exactly they must be doing and what other parts of the organization will be doing. A budget is designed to give managers a clear understanding of the companys financial goals, from expected cost savings to targeted revenues. e) Instructing a budget is often as much an executive order as an organizational plans since it lays down what must be done. It may, therefore, be regarded by subordinates as a management instruction. f) Authorising if a budget is a management instruction then conversely it is an authorisation to take budgeted action. g) Motivating in that a budget sets a target for the different members of the organization so that it can act to motivate them to try and attain their budgeted targets. h) Performance measuring - by providing a benchmark against which actual performance can be measured, a budget clearly plays a crucial role in the important task of performance measurement.
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i) Decision-making it should never be assumed that a budget is set in concrete and when changing course a well-designed budget is a very useful tool in evaluating the consequences of a proposed alternative since the effect of any change can be traced throughout the entire organization. j) Delegating budgets delegate responsibility to the managers who assume authority for a specified set of resources and activities. In this way budgets emphasise even more the existing organizational structure within the company. k) Educating the educating effect of a budget is perhaps most evident when the process is introduced in a company. Operating managers learn not only the technical aspects of budgeting but also how the company functions and how their business units interact with others. l) Better management of subordinates a budget enhances the skills of operating managers not only by educating them about how the company functions, but also by giving them the opportunity to manage their subordinates in a more professional manner. The requirements that all these functions impose upon a budget make it difficult for one system to meet them all. It is precisely because these requirements differ, that role conflicts in budgeting system arise. These need to be appropriately dealt with so that dysfunctional behaviour like budget padding or other damaging budget games for the company do not appear. Since there are three major roles for any budgeting system, at least three conflicts may arise (Barrett, Fraser, 1977, p. 141)
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1.3.5. Types of budgeting

a. Traditional Incremental Budgeting
The traditional incremental budgeting does not analyse all planned expenditures with the same intensity. The changes from previous year's expenditures in the proposed budget for the next year which is usually increments, hence the name incremental budgeting but of course, decrements from previous years are also possible, receive the most attention. The expenditures that were already present in last year's budget will not be thoroughly analysed. According to Wildawsky and Caiden (1997, pp. 45-49) the concept of a base is central to incremental budgeting. The base is the general expectation that programs will be carried out on or close to the current level of expenditures. The budget for the next year is thus largely determined by the budget of the last year. For that reason, it is very important for an agency seeking a long-term increase in its budget to achieve the inclusion of a new project in its base, as this will then be considered as an accepted part of what will be done. The authors compare the budget with an iceberg from which the largest part of it lies below the surface outside of anybody's control. The rationale for the lack of thorough annual review is that because last year's expenditures were already justified, recurring expenditures do not need annual review given the relative stability in the overall environment of the agency. This approach also assumes that the analysts, decisionmakers and budgeters do not enough time and mental energy to analyse and justify all planned expenditures every year. By leaving large portions of the budget out of a thorough annual analysis, incremental budgeting demands less time and energy than budgeting by comprehensive analysis. Another reason is the number of long-term commitments in the budget: mandatory programs (entitlements), such as veteran's
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pensions, cannot simply be eliminated at will. These commitments are legally binding and must be met regardless of circumstances. Therefore, they do not need annual revision. After these long-term commitments have been paid for, there is often only a small percentage of the budget left for anybody's discretion. Another linked concept is the idea of fair share. It means not only the established base, but also the (common) expectation that an agency should receive a proportion of funds as compared to others, that must be increased or decreased over the base depending on circumstances. In any case history plays a big role, because it largely determines the base and the fair share of an agency. The advantage of incremental budgeting is that it simplifies calculations and decisionmaking, because only changes from the previous year must be considered and negotiated, thus saving considerable time and energy and decreasing conflict over expenditures, because the last year's share of the budget becomes the base and does not need thorough annual re-justification. The disadvantage of incremental budgeting is that past expenditures may not necessarily justify their continuation in the changing conditions of the future. This means a waste of the resources. The next budgeting approach -the ZBB -tries to address this problem. b. Zero-Based Budgeting (ZBB)
Hyde and Shafritz (1978, pp. 21 8-219) note that zero-based budgeting refers to the budgeting process that is first and foremost a rejection of the incremental decisionmaking model of budgeting. It demands a rejustification of the entire budget submission. It focuses on the concept of priorities, which is more than an elaboration of alternatives.
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It reflects a concern that the governments should do things that are the most important of all of the things they could do. In other words, the ZBB states that all programs and expenditures must be reviewed every year, the mere fact that a program or expenditure was there last year provides no justification that it should be continued in the next year. Premchand (1983, pp. 334-335) refers to (probably) the first experiment with ZBB in the Department of Agriculture in 1962 that tried to fully implement the concept. The practical experience, however, revealed some problems. The approach required excessive paper work and brought little or no change in the size or direction of the budget. As a result, the experience in 1962 failed. However, the ZBB was used in the federal level from 1977- 198 1. This time the concept was more elaborate. Premchand also gives the major features of ZBB: Examination of programs at various levels of resource allocation and performance.. Objectives have to be formulated for each agency The activities of each agency are converted into decision packages, which are developed to show performance at various resource levels such as minimum, intermediate, current, and enhancement levels, and The decision packages are then evaluated and arranged at each level of management in ranking order The ranking order enables the agencies to define the minimum effort and indicate the incremental levels of effort above the minimum of each program. Those levels are then ranked in a decreasing order and a cut-off point is established below which the items were not funded. Wildawsky and Caiden (1997, p. 270) see ZBB as manifesting vertical comprehensiveness in contrast to horizontal comprehensiveness of PPB6: Every year alternative expenditure levels from base zero are considered. PPB compares programs, while ZBB compares alternative funding levels of the same program.
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MacManus (1998, pp. 257-260) refers to both advantages and disadvantages of the ZBB. The proponents like its attack on incrementalism, low-priority programs and its efforts to force government officials to engage in a more rational analysis of alternative service delivery mechanisms and levels. They also like the bottom-up rather than program budgeting top-down approach. The opponents of ZBB complain about the amount of time and resources it takes. They argue that the amount of paperwork needed for a single program's decision packages makes it improbable that all decision packages can be thoroughly analysed and ranked by the policymakers. They also note that ZBB does not consider that fact that certain programs are very unlikely to be eliminated while others have little or no chance of getting funded. There is also a lot of discussion about whether past knowledge and history should be eliminated in decision-making. Wildawsky and Caiden (1997, p. 271) are quite sceptical about eliminating the past in ZBB. They wrote: To say that a budgetary process is a historical is to conclude that the sources of error multiply while the chances of correcting mistake decrease: If history is abolished, nothing is ever settled. Old quarrels resurface as new conflicts. As mistrust grows with conflict, willingness to admit (and hence to correct) the error diminishes. Doing without the history is a little like abolishing memory -momentarily convenient, perhaps, but ultimately embarrassing. They also noted that the ZBB did not exist in its pure form in any place. When 80- 90% of the budget becomes the base and only the rest is annually reviewed that is very close to incremental budgeting. The difficulties and limitations of ZBB have resulted in creating a hybrid or target-basedbudgeting.
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c.
Target-Based Budgeting (TBB)
MacManus (1998, pp. 257-260) refers to this type of budgeting as incorporating the most attractive elements of the ZBB or the ranking of funding alternatives, and using costbenefit estimates for different budget parameters. TBB recognizes that certain programs are likely to be funded in most cases and therefore do not need much annual scrutiny. Under TBB each organizational unit will be asked to develop two requests. The First is activities for the target budget (funding level pre-established by the budget office). The second is the others that will be funded given additional resources. All items of the wish-list are ranked in terms of priority. The advantage of TBB is reduced paperwork, because not all programs must be presented in terms of decision packages. Since the target-base can easily be shifted, this increases its responsiveness to changing conditions and increases the ability of program managers to use their judgment in resource allocation. However, the flexibility of TBB can also be its disadvantage as it allows irresponsible managers to include their pet projects into the base to protect them from review. The incremental budgeting and ZBB are the basic budgeting approaches. The other budgeting types, line item budgeting, performance budgeting and program/mission budgeting, consider resource allocation incrementally, from base zero or use a combination of these two approaches. These other types of budgeting will be described in the following below. d. Line-Item Budgeting
The line-item budget concentrates on objects of expenditures, i.e., the items that are purchased rather on the purposes for which they are bought. They are presented to the
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government as a whole and also to individual agencies and organizations. This has historically been the most common budget format. The most important skills with this type of budget were those of accountants. According to MacManus (1998, p. 253) this budget type is the oldest devised in the twentieth century. The examples of classes of expenditures include personal services, supplies, travel and utilities. These classes can further be broken down into sub-classes. For example personnel services can be broken down into salaries, wages, overtime and fringe benefits. Giving separate codes to individual accounts in the budget allows further classification. The line-item budget format and incremental budgeting go hand-in-hand. Although incremental budgeting does not necessarily always use the line-item format, when the line-item format is used as the principal budget format, its accounts are most often analysed and justified incrementally. Schick (1978, pp. 49-53) notes that the line- item budget is well suited for the first of the three major functions of budgeting: control7. The control orientation deals with a relatively narrow range of objectives. MacManus (1998, p. 253) refers to advantages and disadvantages of line-item budgets. The biggest advantage of the line-item format is its simplicity. It is easy to understand and use, especially when the information is presented by organizational units such as departments or divisions, or freestanding projects. The format promotes year-to- year comparisons, especially in terms of percentages. There has been much criticism against inadequate budget structures because of these contradictory goals, but he is convinced that just because of these multiple goals the traditional budgeting is inferior for most purposes, but yet superior over all. These shortcomings of the line item budgeting have caused the emergence of other types of budgeting, especially performance and program/mission budgeting and ZBB. The
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description of ZBB was already given above. The remaining major budgeting types will be described next. e. Performance Budgeting
Because of conceptual confusion, it is not clear when performance budgeting started. MacManus (1998, p. 260) mentions several options ranging from the 1910s to 1949 when the Hoover Commission issued its report regarding the deficiencies of traditional control- and accounting-oriented budgeting. Hyde and Shafritz (1978, pp. 78-79) propose a general definition of performance budgeting and contrast it to program budgeting: Performance budgeting presents purpose and objectives for which funds are being allocated, examines costs of programs and activities established to meet these objectives, and identifies and analyses quantitative data measuring work performed and accomplishments. In performance budgeting, programs are linked to the various higher levels of an organization and serve as labels that encompass and structure the subordinate performance units. .Overall the performance budgeting tends to be retrospective -focusing on previous accomplishments -while program budgeting tends to be forward looking -involving policy planning and forecasts. This definition is consistent with Schick's (1978, pp. 54-59) theory of three functions of budgeting: control, management and planning. According to this theory, performance budgeting would be most suitable for the second -management -orientation of the budgeting. It would facilitate the efficient performance of fixed prescribed activities. Its focus is on the details. In performance budgeting, the work and activities are treated as an ends in themselves. Unlike in program budgeting, the work and activities relate to the functions and work of a concrete operating unit. Therefore their classification is usually
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done along organizational lines. Thus, this classification is most useful for an administrator or manager who has to organize the daily operations of an organization. f. Program Budgeting
It seems that the essence of program budgeting can best be explained by contrasting it with the other types of budgeting. Using Schick's (1978) classification mentioned above, the program budgeting assumes the primacy of the third function a budget can have or the planning function. In the context of budgeting, planning means the determination of objectives, the evaluating of alternative courses of action and the authorization of selected programs. A planning orientation focuses on the broadest range of issues. These are governmental policies and their link to particular expenditure choices, how programs should be assessed and the criteria on the basis of which they should be created or terminated. Unlike in performance budgeting where the objective is fixed, the objective itself is a variable in program budgeting. The analysis of existing programs may lead to a statement of new objectives and a termination of old ones. Program budgeting focuses on expenditure aggregates, the details matter only when they contribute to the analysis of the total. Whereas performance budgeting used the tools of scientific management and cost accounting, program budgeting uses techniques from systems analysis and economics. In performance budgeting, the focus is on fulfilling the given objectives at least cost. In program budgeting, the focus is on allocating resources Wildawsky and Caiden (1997, p. 270) give the distinction between program budgeting and ZBB. While ZBB promotes vertical comprehensiveness, the same programs are analysed at different funding levels. Program budgeting promotes horizontal comprehensiveness when comparing different programs.
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g.
Planning, Programming and Budgeting System (PPBS)
In very general terms, the PPBS begin with determining national interests and threats to those interests. A strategy is then developed to encounter the threats and defend the interests. Then the programs are developed to fulfil the broad goals or missions of the strategy. The programs are structured in a manner that facilitates resource allocation between and within them. The budget is just the expression of the programs in financial terms as used by the legislature. Programming is thus the link that unites plans with budgets. Contrary to misconceptions, the goal of the PPBS is not to make decisions, but just packaging information for top-level decision-makers in the manner that they could make informed decisions. h. Missions and Mission Budgeting
There is considerably confusion about what a mission is. The DoD defines a mission as: The task, together with the purpose, that clearly indicates the action to be taken and the reason there for The NATO definition is similar: A clear, concise statement of the task of the command and its purpose. However these definitions are so general that they allow a wide range of interpretations. In general usage, a mission could thus be synonymous with task, objective or purpose. Both the military forces and the civilian sector of the government have missions. The military strategy gives major missions to the forces. However, these missions are general in nature. There could also be other, more detailed missions. The broad missions can be taken from the strategy, but at the same time, even the smallest military unit must have a clear purpose, a mission or missions.
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1.3.6. Budgeting process

The process of budgeting generally involves an iterative cycle which moves between targets of desirable performance and estimates of feasible performance until there is, hopefully, convergence to a plan which is both feasible and acceptable (Emmanuel, Otley, Merchant, 1990, p. 31). Alternatively, if we look beyond many details and iterations of the usual budgeting process we can see that there is a simple universally applicable budgeting process, the phases of which can be described in the following manner (Finney, 1994, p. 16): 1. Budget forms and instructions are distributed to all managers. 2. The budget forms are filled out and submitted. 3. The individual budgets are transformed into appropriate budgeting/accounting terms and consolidated into one overall company budget. 4. The budget is reviewed, modified as necessary, and approved. 5. The final budget is then used throughout the year to control and measure the organization. The inevitable dependence of individual budgets on one another requires that budgets be prepared in a hierarchical manner. Figure 2 indicates a common hierarchical form of the budgeting process together with the necessary data flow between particular budgets and phases of their making. This picture shows that despite having only a few general phases, the budgeting process, due to its linearity and iteration loop, are in fact a very complex and time consuming process.
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Figure 2: Common hierarchical form of the budgeting process
Since it is so complex and important, the budgeting process requires lots of decision making on the particular choices that developers of budgets have at their disposal. Churchill (1984, p. 151) has provided a list of eight budget choices that managers have to be concerned with when setting up the budgeting system. Thereby, these concerns vary according to whether the company intends to use its budgets primarily for planning or for control. These budget choices are: 1. Whether it is to be prepared from the bottom-up or top-down, 2. How it is to be implemented, 3. How the budget process is linked to the strategic planning process, 4. Whether it should be a rolling budget and how often it should be revised,
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5. Whether performance should be evaluated against the original budget or the one relating to the actual activity level of the organization, 6. Whether compensation/bonuses should be based on budgeted performance, 7. What budget evaluation criteria should be used, and 8. What degree of ''stretch'' should be incorporated into the budget? In general, accounting theory suggests that large companies should be concerned more with operational efficiency and emphasize coordination and control aspects of budgets, while smaller innovative firms should concentrate more on the planning aspects of their budgets. Since the first budget choice about the process used to create the budget is very important, these particular methods will be elaborated on in more detail. Generally, managements choices on how to start creating budgets fall into one of three major approaches (Rasmussen, Ichors, 2000, p. 19) a. Top-down budgeting process
The top-down approach of budgeting means that upper management completes the budgeting process with minimal involvement from the management of individual operating units or departments. The levels beneath headquarters level receive the budget amounts from the top and they are expected to adhere to these given amounts. Individual operating units have very little, if any, input into the determination of the budget amounts. 2. Bottom-up b. Bottom-up budgeting process
With the bottom-up approach the budget is established at the bottom levels of the organization at the operating unit, departmental or cost/profit centre level and then
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brought up to the corporate level. Guidelines and targets are set at the corporate level, but specific amounts and budgeted account balances are not passed down to the individual departments. Rather, these entities are given the freedom to create their own budgets at the local level. c. Top-down/Bottom-up budgeting process
A top-down/bottom-up approach combines and balances the best elements of the two approaches. This approach allows input from lower and upper management into the model. The budget process becomes collaboration between lower and top management rather than a one-way exercise. In the combined approach, lower management submits the budget to upper management and then upper management modifies the submitted budget to reflect the operational knowledge that they have.
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1.4.
Zero Base Budgeting
1.4.1. Origin of the method and its main authors Modern zero-base budgeting (ZBB) methodology was developed by Peter A. Pyhrr for implementation at Texas Instruments in 1969. Pyhrr advocated a budgeting system where managers need to build each years budget from the ground up, building a case for their spending as if no baseline exists start from zero, and present their requests for appropriations in such a fashion that all funds can be allocated on the basis of cost/benefit or some similar kind of evaluative analysis. This was in total contrast to the traditional budgeting process which allowed managers to start with last years expenditures and add a percent for inflation to come up with next years budget, making them justify only those incremental increases while automatically accepting current levels of spending without question (Suver, Brown, 1977, p. 77). The focuses of zero-base budgeting process are two basic questions: Are the current activities efficient and effective? and Should current activities be eliminated or reduced to fund higher-priority or new programs? ZBB is trying to find answers to these questions by cooperating with the most management techniques; ZBB concept was not entirely new when Pyhrr introduced it at TI. The US Department of Agriculture had begun using a ground up budgeting technique in 1962, while as early as 1924, E. Hilton Young advocated re-justifying budget programs annually (Burrows, Syme, 2000, p. 227) using the decision-package ranking process. This process provides management with an operating tool to evaluate and allocate its resources effectively and efficiently, and provides the individual manager with a mechanism for identifying, evaluating, and communicating his/her activities and alternatives to higher levels of management (Pyhrr, 1977, p. 1).
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1.4.2. Main ideas of the method

The zero-base approach requires each organization to evaluate and review all its programs and activities systematically on the basis of performance output as well as costs, to emphasize managerial decision making first and numbers-oriented budgets second, and to increase the analysis of allocation alternatives. Although management approaches to the adoption of ZBB differ among organizations since the process must be adapted to fit the specific needs of each user, the basic steps to effective ZBB can still be identified (Pyhrr, 1976, p. 7): a. b. c. Identify decision units. Describe each decision unit as a decision package. Evaluate and rank all these packages by cost/benefit analysis to develop a budget
request and profit and loss account. d. Allocate resources accordingly.
ZBB starts with the creation of decision packages which are the building blocks of ZBB. The decision package is a document that identifies and describes a specific activity in such a manner that management can; a) evaluate it and rank it against other activities competing for the same or similar limited resources and b) decide whether to approve it or disapprove it. Each package includes a statement of the goals of the activity, the program by which the goals are to be achieved, the benefits expected from the program, the alternatives to the program, the consequences of not approving the package, and the expenditures of funds and personnel the activity requires. There are two basic types of decision packages (Pyhrr, 1970, p. 113): 1. Mutually exclusive packages identify alternative means for performing the same function. 2. Incremental packages reflect different levels of effort that may be expended on a specific function.
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Figure 3: The detailed process of decision packages sources: (ibid., p. 114):
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There should be at least three decision-packages for each decision-unit, though there could be as many as ten or even more. The three elementary categories of decisionpackages are presented below. More than one decision package could be presented for each category. a. Base package. This type of package meets only the most fundamental service
needs of the decision units clientele and represents the minimum level of funding needed for the units services to remain viable. There could be multiple base packages, each addressing a different way to provide the base service. This represents an important departure from incremental budgeting in that an incremental budget never considers what the absolute minimum level of funding a program can survive on is. Rather, the current level of spending is usually considered a sort of de facto minimum. b. Current service package. This type describes what it takes to continue the level of
service currently provided to the units clientele. The difference between the base package and the current service level may be expressed by multiple decision packages, with each package representing one aspect of what it takes to get from base funding to the current service level. There could also be different decision packages describing different means for achieving the same service level. c. Enhanced package. This category addresses resource required to expand service
beyond current levels. There could be any number of enhanced packages. Each manager takes his/her areas forecasted expense level for the current year, identifies the activities creating this expense, and calculates the costs for each activity. Once the manager has formulated his/her preliminary list of decision packages and has received the formalized set of assumptions about next years operations, she/he translates the packages into business-as-usual packages for the upcoming year.
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The manager then develops his/her final set of decision packages from his/her business as- usual packages by segmenting each of them into mutually exclusive and incremental packages wherever possible and noting the discarded alternatives. When determining incremental packages, the manager must establish a minimum level of effort, which must be below the current level of operation, and then identify additional levels or increments as separate decision packages. Finally, the manager should identify all the new activities in his/her area for the upcoming year, develop the decision packages that handle them, and attach them to his/her final set. The identification and evaluation of different levels of effort represent the two most difficult aspect of the zero-base analysis, yet they are the key elements of the process. By identifying a minimum level of effort, plus additional increments as separate decision packages, each manager presents the following alternatives for top managements decision making (Pyhrr, 1976, p. 9): - eliminate the operation, - reduce the level of funding, - maintain the same level of effort, or- increase levels of funding and performance. The second important phase of ZBB is the ranking process. This technique allows management to allocate its limited resources by listing all the packages identified in order of decreasing benefit to the company. It also helps management to identify the benefits to be gained at each level of expenditure and to study the consequences of not approving additional decision packages ranked below that expenditure level. The process itself follows a hierarchical structure of the company where at each level the decision packages are reviewed, ranked and consolidated, and then forwarded to the next higher
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organizational level for the same procedure all the way to the top. The organizations final budget equals the sum of the budgets of those decision packages accepted for funding (Pyhrr, 1977, p. 6).
Figure 4: The participative nature of the ZBB process is illustrated in the following
In order to reduce the number of packages to be reviewed in detail by successively higher levels of management and to concentrate top managements attention on the lower ranked activities, a cut-off expense line should be established at each organizational level. In this way, management can briefly review packages above the cut-off line while at the same time can devote most of the available time to decision packages below the line which are then studied in detail and ranked. The ability to achieve a list of ranked packages at any given organizational level allows management to evaluate the desirability of various expenditure levels throughout the budgeting process. Also, this
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ranking list provides management with a reference point to be used during the operating year to identify the activities to be reduced or expanded if allowable expenditure levels change or if the organization is over or under budget during the year (Pyhrr, 1970, p. 116). If the complete ZBB process is contemplated, it can be said that it is a top-down, bottomup approach to budgeting, which requires the participation of managers at all levels within the organizational hierarchy. To sum up, it can be said that the purpose of the ZBB process is to help management evaluate expenditures and make trade-offs among current operations, development needs, and profits for top management decision making and allocation of resources (Pyhrr, 1976, p. 6).
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1.4.3. Advantages and disadvantages of ZBB

Advantages of zero-base budgeting: - Properly carried out, it should result in a more efficient allocation of resources to activities and departments. - ZBB focuses attention on value for money and makes explicit the relationship between the input of resources and the output benefits. - It develops a questioning attitude and makes it easier to identify inefficient, obsolete or less cost-effective operations. - ZBB process leads to greater staff and management knowledge of the operations and activities of the organization and can increase motivation. - It is a systematic way of challenging the status quo and obliges the organization to examine alternative activities and existing costs behaviour patterns and expenditure levels. Disadvantages of zero-base budgeting: - It is a time consuming process which can generate volumes of paper work. - There is a considerable management skill required in both drawing up decision packages and in the ranking process. - ZBB might be perceived as an implied threat to existing programs. - There are considerable problems in ranking packages and there are inevitably many subjective judgements. - The thought of creating a budget from scratch causes considerable resistance if support groups and training programs are not in place.
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1.4.4. Practical use of ZBB

Zero-base budgeting finds its main use in areas where expenditures are not determined directly by manufacturing operations themselves in areas, that is, where the manager has the discretion to choose between different activities (and between different levels of activity) having different direct costs and benefits. These ordinarily include marketing, finance, quality control, maintenance, production planning, engineering, R&D, personnel, data processing, and so on (Pyhrr, 1970, p. 112). Due to the large amount of time that it takes to prepare ZBB, it is suggested that it should be used as a short-term (usually one year) budgeting method which could be selectively applied on a rolling basis throughout the organization. In many cases, ZBB has been used in situations where cost stabilization or control, or even cost reduction was necessary, though most of the benefits that users of ZBB reported have been achieved in reallocating funds and reassigning personnel (Dean, Cowen, 1979a, p. 56).
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1.5. 1.
Article reviews on ZBB Broadnax, Walter D
Zero-base budgeting: new directions for the bureaucracy? The Bureaucrat, 6:56-66, Spring 1977. Mr. Broadnax pegs taxpayer resistance to inefficient government and legislative executive branch concern over the uncontrollable portion of the Federal budget as the motivating factors behind zero base budgeting (ZBB) proposals. He gives an overview of both ZBB and sunset legislation. Potential problems in implementing ZBB in &e bureaucracy are cited. For example, although the Executive Branch can recommend that programs be discontinued, Congress controls the purse strings Mr. Broadnax also points out that ZBB was developed and tested in the private sector where maximizing profits is &e bottom line in establishing priorities. However, government workers are not motivated by the profit motive in setting priorities, and they provide services that the private sector is unable to provide. Therefore, it will not be as simple to motivate government workers to set ZBB priorities as it was in the private sector. The implementation of ZBB in Georgia, for example, resulted in no significant reallocation of resources are the other fear of ZBB opponents is increased paperwork. On the positive side, some advantages of ZBB are that it proves the quality of management information, forces management to clearly state its goals, and decreases bureaucratic ambiguity.
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2.
Pyhrr, Peter A
Zero-base budgeting: where to use it and how to begin. S.A.M. Advanced Management Journal, v. 41, no. 3:4-14, Summer 1976. Zero-base budgeting is primarily a management tool rather than an accounting method. It is applicable in discretionary programs where dost benefit analysis can be applied. From identifying decision units to allocating resources on the basis of cost-benefit it analysis applied to each decision unit. ZBB necessitates a task force of operating and financial managers which must design the process to fit the organization, work with managers at all levels involved with the process, and finally evaluate and revise the ZBB process.
3.
Stonich, Paul J
Zero base planning--a management tool. Managerial Planning, July/Aug. 1976: 1-4. Zero-base planning is a tool that helps cost centre managers analyse operations and allocate funds better. Steps involved include the proper identification and analysis. Of decision units, allocation of critical resources to appropriate activities, and preparation of detailed budgets. Implementation must include designing the system to meet each organization's individual needs, opening communication lines .among managers involved in the decision unit process, and providing adequate training to managers. Aero-base planning through a task force that can be responsible for the steps involved in successfully implementing the new method. Since the concept of zero-base is threatening too many managers, In addition, it is probably best to administer.
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4.
Stonich, Paul J. and Frederick W. Harvey
The new look for budgeting: zero-base planning. Today's Manager, May/June 1976, p. 13-16. Zero-base planning is different in both conceptual and procedural ways from usual budgeting methods. ZBB starts from no base and treats discrete functions or activities just as it would a brand new operation. It requires consideration of the organization's purpose, facilitates the identification of alternative means of accomplishing the purpose, and requires the identification of different increments of service. The article targets the decision unit increments aspect of ZBB: activities and costs over the preceding level. A matching process of services and dollars provides alternatives at various spending
5.
Anthony Bobert N
Zero-base budgeting is a fraud. Wall Street Journal, April 27, 1977 The author says that the name, zero-base budgeting, is a fraud. The one attempt to apply ZBB (state of Georgia) did not result in an analysis of the budget from zero, with a justification for every dollar requested. Within the first budget cycle, the zero benchmark was replaced by 80%. Attention was focused only on the increment over 80% of current spending levels. No one person can annually review all yet, if the job is delegated the ZBB idea of comparing priorities is lost. Compared with current Federal incremental budget procedures, zero-base budgeting has nothing of substance to offer, are not good, and the good parts are not new. The author says that Federal agency experience as far back as the 1960's shows that ranking decision packages according to priority, does not work. Honest agency heads admit that program priority is influenced by the amount of funds likely to be available, rather than the other way around.
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Mr Anthony recommends zero-base review, in which outside experts go into an agency and carefully examine its reason for being, its methods of operation, and its costs. It is time consuming and traumatic and should be done about every five years, not annually.
6.
Carter, Jimmy.
Nation's budgeting and answers negative concerns about the concept. ZBB Business, 65:24-26, January 1977. Jimmy Carter discusses the positive aspects of zero-base Jimmy Carter tells why he will use zero-base budgeting. In contrast to the traditional budgeting approach of incrementing the new on the old, zero-base budgeting demands a total justification of everything from zero. Each function of an organization, regardless of whether it is 50 years old or a brand new proposal is analyzed annually. ZBB draws on systems analysis, problem-solving, cost benefit analysis, and program management techniques. Mr Carter discusses the benefits of implementing ZBB in Georgia where it resulted in a 50 per cent reduction in administrative costs. He states that he will require zero-base budgeting for all Federal departments, bureaus, and boards, by executive order.
7.
Dooskin, Herbert P.
Zero-base budgeting: a plus for government. National Civic Review, 66:118-121, 144, March 1977. Mr Dooskin defines zero-base budgeting (ZBB) and details its functions. and support activities typical of government. ZBB assumes that any budgeting above zero requires justification, and subjects all programs to the level of scrutiny usually reserved for new programs. This encourages executives to set priorities and to find the most effective and inexpensive method of executing particular programs done or ZBB does not overcome
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work, and supervisors are reluctant to lay of unnecessary staff. Also, ZBB takes a great deal of time, efficient, government or reduce costs in and of itself, but it may help. He says that ZBB is particularly appropriate in service ZBB is not without pitfalls .Overall policy planning must be Fear of supervisors' scrutiny is not easily Mr Dooskin concludes that ZBB is a tool that cannot bring about
8.
Hayward, John T.
Buzz words galore. Government Executive, v.8, no. 9:19-21, Sept. 1976. The author voices his opinion on Carter's buzzword, zero-base budgeting. The concept seems new, but continuing fundings in Washington already undergo five stages of review before getting into the budget--authorization, appropriation, apportionment, obligation and expenditure processes unrelated to the state budgeting process, where lead to an eventually sensible process. ZBB has been used up to now, year to come will decide the future of the nation. Congressional input into the budget process--and this will Hardware not buzzwords, with the change of the Federal fiscal ZBB will only add to the paperwork,
9.
McGinnis, James F.
Pluses and minuses of zero-base budgeting Administrative Management Sept. 1976: 22-23 91. Zero-base budgeting is the process of carefully analyzing budgets top to bottom. There is no automatic carry forward of funds--all expenditures must be justified for the forthcoming fiscal year. The budgeting process begins at the lowest levels of management and works upward, depending on careful orchestration and special reports. Budget reviewers make decisions based on a knowledgeable overview of a segment of an
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organization as it relates to the whole. In the process, managers see the basic interrelationships within the company. The keys to properly implementing zero-base budgeting are: 1. Unqualified support of top management; 2. Effective design of the process; and 3. Effective management of the budgeting. Among the minuses are that the adoption involves an extensive manual, additional cost factors, and initial disruption of normal operations. But on the plus side, managers will be forced to identify in efficient and obsolete operations.
10.
Rehfuss, John.
Zero-base budgeting: the experience to date. Public Personnel Management, 6:181187, May-June 1977. Mr. Rehfuss offers a history and a definition of zero-base budgeting (ZBB). He emphasizes decision packages, gives a short comparison between ZBB and PPBs, and describes private and government implementations of ZBB. The article discusses the pros and cons of ZBB as well. provides high level managers detailed information on lower level activities and on lower level management performers. It suggests how funding levels may be manipulated, to seek alternatives, consider cost reductions, axil become more ZBB Lower level managers are forced knowledgeable about both their functions and their organizational interrelationships. In addition, involvement with the budget process adds to lower level managers' knowledge of government functions. One of the most significant advantages of ZBB is that it establishes a financial planning phase prior to budget preparation, dragging and resistance when programs are endangered. Also, many agencies are hampered by federally earmarked funds which work against ZBB prioritizing. People also complain that the budget preparation cycle is too short for effective implementation of ZBB.
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11.
Havemann, Joel.
Taking up the tools to tame the bureaucracy: zero-base budgeting. National Journal, 9:514-517, April 2, 1977. James T. McIntyre, Office of Management and Budget deputy director, hopes that Federal zero-base budgeting (ZBB) guidelines will be ready in time for Federal agencies to use as they prepare theirfiscal1979 budgets. For each program (decision unit) agencies must establish a minimum budget level, below which the program would be without value. This would constitute one decision package. Taking the same program, the agency must identify add-ons that would lift the program above its current level. This would constitute another decision package. Decisions packages would be ranked in order of importance. Agencies have the option to examine in depth only the lower ranked packages. Federal agencies fear that OMB will use ZBB to slash programs to meet President Carter's goal of a balanced budget in fiscal 1981. They also fear that their existing budgeting systems will be obliterated, that ZBB will become an exercise in paperwork, and that the public may react badly if popular programs are ranked low. The article also compares ZBB with PPB and IBO and includes a case study.
12.
Lynch, Thomas.
A context for zero-base budgeting. The Bureaucrat, 6:3-11, Spring 1977. In this introductory article, Mr Lynch gives a short definition and history of zero-base budgeting (ZBB) and introduces the other authors. He points out that ZBB could repeat many mistakes of the Federal implementation of planning-programming budgeting (PPB). Facing the Carter administration been a trend towards Federal centralization of social programs traditionally funded locally, through entitlement;. ZBB is an Executive
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Branch tool addressed to the appropriations stage and cannot be applied to uncontrollable expenditures which may be controlled at the authorization stage, through some form of sunset legislation. Congressman Jack Brooks, Chairman of the Government Operations Committee has urged President Carter to postpone mediate Executive Branch introduction of ZBB. If the recession can be stopped, growth of 'uncontrollable programs will slow down, enabling the Carter administration to apply ZBB to future Federal programs. The article sets ZBB in the context of the economic conditions a by-product of; the recession has. The article also includes references to other sources on ZBB. .
13.
Minmier, George Samuel.
An evaluation of the zero-base budgeting system in governmental institutions. Atlanta, Ga., Georgia State University, School of Business Administration, 1975 HJ2053.G4M55 264 p Mr. Minmier compares various budgetary procedures and discusses the historical development of zero-based budgeting (ZBB). He details Georgia's initial attempts in zero-base budgeting, from 1973 to 1975. The focus on ZBB procedural changes as the system evolved. The author includes an analysis of Georgia's experience and its implications for the future. The book also contains tables, exhibits, and a bibliography.
14.
Scheiring, Michael J.
Zero-base budgeting in New Jersey. State Government, v. 49, no.3:174-179, Summer 1976. By order of Governor Brendan Byrne's memorandum of July 22, 1974, the state of New Jersey adopted zero-base budgeting for all departments and agencies. deficit projected
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for Fi 1976. The time for budget reform seemed ripe. This was done in the face of an impending $450 million New Jersey 's ZBB system followed the prescribed basic steps of making decision packages, evaluating and ranking the decision packages, and fin all y allocating the resources accordingly. Forms were developed to facilitate each step.
15.
MacFarlane, John A.
Zero-base budgeting in action- - there's nothing to it.'' CA Magazine, 109:28-32, Dec. 1976. In the face of severe financial difficulties, McMaster University decided t o t r y zerobase budgeting to help relieve the forecasted $2.7 million deficit for FY 1975-76. Expected savings were to be effected in at least one of two ways: 1) finding less costly alternative ways to do things, or 2) shutting down operations that were ranked a t the lowest priority. In addition to the usual evaluation functions of decision packages,'' McMaster identified an alternative that caused policy effects to be evaluated as well. The results of using ZBB involved changes in staffing, changes in the structure of accounting records and increased knowledge of the operation of the University as a whole. McMaster University achieved its goal of a balanced budget ahead of schedule. While ZBB was found to have borne problems, McMaster planned to use the system again.
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2. 2.1.
PROFILE OF ISRO/ISAC
Background of ISRO
It is not the purpose of this research to dwell on the details of rocket science or into technical aspects of ISRO. The beginnings, however, need to be noted to understand the management of the programme during analysis of ones financial administration.
2.1.1. History of ISRO

The Indian government created a dedicated institutional framework for its national space program. This framework includes: the Department of Space (DOS), the administrative agency responsible for the Indian space program; the Indian Space Research Organization (ISRO), the primary operational entity responsible for Indian space activities; and the Antrix Corporation, a government-owned organization responsible for marketing Indias space products and services.10From the inception of its space program in 1962, India has favoured an evolutionary technology development process Mistry, D. (1998). The experience of India, over the past 40 plus years, in developing and operating a space program focused on providing direct societal benefits offers a number of lessons as developing countries across the globe become increasingly involved in space activities. For a space program to be successful in the context of a developing nation, that program must provide tangible benefits to that country and its people and be tied to broader development objectives (Christensen, et al., 2009). The benefits from space activities have now become widely known in the country. In fact there is worldwide recognition of the importance of space activities not only for the developed nations but in particular for the developing countries. Such recognition, even at well-informed levels, did not exist in the country when India formally organized its modest space effort
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through the establishment of the Indian National Committee for Space Research (INCOSPAR) in 1962. In November 1963 the first sounding rocket was launched from the Thumba Rocket Launching Station (TERLS) near Trivandrum. The founders of the Indian space programme recognized the potential for the immense benefits from space technology even in the early 1960s, when humanity was just ushering in the space era. Early ideas about possible space applications of relevance to India can be found in a number of writings and speeches by Dr Sarabhai, a selection of which have been brought out in a publication by the Indian Space Research Organization (ISRO, 1979). The early ideas were mainly cantered on the utilization of satellites for television and developmental education, meteorology, and remote sensing for natural resources management. The programme also included development and launch of sounding rockets for space science research. Though international cooperation dominated in the early years, careful stress was placed on self-reliance. Nuclei of trained manpower were formed at laboratories that were then part of INCOSPAR but were constituted into ISRO in 1969 (Rajan, YS, 1988).
2.2.
The Aim and Vision of ISRO
Though here is no precise mission and vision statement for ISRO, it is widely proclaimed that the following addressed by Dr. Vikram Sarabhai is accepted as its Vision (Joshi, P. (Ed.). 1992). There are some who question the relevance of space activities in a developing nation. To us, there is no ambiguity of purpose. We do not have the fantasy of competing with the economically advanced nations in the exploration of the moon or the planets or manned space-flight. But we are convinced that if we are to play a meaningful role nationally, and in the community of nations, we must be second to none in the
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application of advanced technologies to the real problems of man and society (Kalam, A. P. J. 2003). Indias vision for the use of outer space has always been to achieve socioeconomic development objectives as expressed in the Citizens Charter issued by the Department of Space. The Charter inter alia specifies that India is committed to achieving indigenous capability for the design and development of spacecraft, technologies for communications, the survey of national resources, research and development in space sciences and associated technologies, and the application of the space programme for national development (Kasturirangan, K. 2006). In addition, the DOS aims: (i)to carry out research and development in satellite and launch vehicle technology with a goal of achieving self-reliance; (ii) to provide national space infrastructure to fulfil the telecommunication and broadcasting needs of the country; (iii)to provide satellite services required for weather forecasting, monitoring, etc.; (iv)to provide satellite imagery required for the survey of natural resources and for national security; (v) to promote research and development in space sciences; and(vi) the development of an applications programme. (Sharma, S. 2007) DOS implements the aforesaid objectives by: (i) providing the required transponder capacity and facilities to meet the satellite communications, broadcasting and national security requirements;(ii) providing adequate earth observation capability in multiple spectral, spatial and temporal resolutions; (iii) developing indigenous capabilities and providing launch services to meet national and commercial needs; and, (iv) providing its products and services in a prompt and efficient manner to all users/clients (Baskaran. A, 2005).
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The contribution of ISRO to the nation will be left unfair if there isnt any discussion over its space programmes. The following section shows the glimpse of various space programmes
2.3.
The Space Programmes
The first generation of space launch vehicles began with the Satellite Launch Vehicle in 1979. Technologies from this and other early launch vehicles, along with judicious use of technology transfer, support the present generation of launchers, the Polar Satellite Launch Vehicle (PSLV) and the Geosynchronous Satellite Launch Vehicle (GSLV). The GSLV in particular is an interesting example of Indias incremental dev elopment efforts. The first stage, a 130-ton solid booster, is proven PSLV technology; however, the fourth stage is a Russian supplied cryogenic engine, Mistry, D. (1998). ISRO is relying on the Russian engine to gain experience with cryogenic technology as they develop an indigenous fourth stage (ISRO, 2007) a. India also possesses an indigenous capacity to build and operate world-class satellites, with a particular focus on communications and Earth observation platforms. The INSAT series of satellites provides an advanced telecommunications capability in combination with a meteorological capability. The Indian Satellite System (IRS) provides resolution and sensing capabilities comparable to systems operated by the most technically advanced space actors, including government and private entities. Indias satellite capabilities have enabled a number of successful applications focused on providing societal services. The INSAT series has been used to provide rural connectivity, resulting in the expansion of access to public television from26% of the population in 1983 to 90% in 2005,Kasturirangan, K. (2006).Tele-education and telemedicine applications have also been developed using Indias satellite communication
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capabilities Bagchi S. (2006).For example, in the pilot phase of the HEALTHSAT program, using existing INSAT capabilities, 152 remote and rural clinics were connected to 34 specialty hospitals in major population centres(ISRO, 2007)b. India launched a dedicated communications satellite in early 2008, to provide communications links between urban specialty health centres and rural clinics. A similar program for the education sector, the EDUSAT program, has connected 10,200 terminals across India to facilitate instruction (ISRO, 2007) b. The IRS satellites are used for natural disaster monitoring purposes and to provide data to decision makers for agricultural and natural resource monitoring and management. For example, the Rajiv Gandhi National Drinking Water Technology Mission used IRS-derived data to map potential groundwater sources, a capability that is especially useful when applied in rural communities. Using this data, 200,000 groundwater wells were drilled in 160,000 villages in rural India, with a success rate of 92%. This is compared to a 42% success rate using conventional siting methods (Thomas, V.A. and Goel, P.S, 2003).Remote sensing applications such as this; help India manage its factors of production while supporting the populace. The successful launch of PSLV-C11 CHANDRAYAAN-1 from Sriharikota on October 22, 2008 was a big leap in Indian space age setting up another benchmark and PSLVC10 successfully launched TECSAR satellite under a commercial contract with Antrix Corporation by January 2008. PSLV-C14 successfully launches Seven Satellites OCEANSAT-2, which would provide data about plant life in the oceans. It would help in locating schools of fish and monitoring algal blooms which were harmful to fish life. It was also helping in forecasting weather and provides information on how cyclones generated also Four CUBESAT Satellites and Two RUBIN-9, PSLV-C12 successfully launched RISAT-2 and ANUSAT from Sriharikota during 2009 (Hindu, 2009)
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The advancement in GSLV was having a setback by little failure in their launches which failed to launch twice in the same year of 2010 which could have provided a major boost in economic and strategically improved the image of Indian space programme adding support for Indian defence and telecom field (Jayaraman K. S, 2011). PSLV-C18 successfully launches Megha-Tropiques, Jugnu, SRMSat and VesselSat-1 from Sriharikota that was useful to the global community for measuring the precipitation in the tropical regions of the world. Twenty-one scientific teams from several countries were using the information for doing research on weather in the tropical countries by October 12, 2011. Also GSAT-12, GSAT-8, RESOURCESAT-2, YOUTHSAT and XSAT were launched from Sriharikota during the year 2011 (Mehmet Ali, A. K. 2012) The year 2012 was just another successful year with as many as four launches with connection to weather, telecom, communication and navigation satellites were put into their orbits namely GSAT-10 by Ariane-5 VA-209 from Kourou French Guiana (September 29, 2012). ISRO's Polar Satellite Launch Vehicle, PSLV-C21 successfully launched SPOT 6 and PROITERES and RISAT-1 from Sriharikota due September 2012 (Arun Ram, 2012). Since 1975, Indias space agency has built 62 satellites and 38 rockets. It initially constructed light rockets that could only put small 50kg to 100 kg scientific satellites to low-earth-orbit (LEO); none of these had significant military or economic capabilities. In the mid-1990s, however, it began launching the more powerful Polar Satellite Launch Vehicle (PSLV) and sequentially developed the even more powerful Geostationary Satellite Launch Vehicle (GSLV)which uses the PSLVs first two stages and has a cryogenic engine, initially built by Russia and now built by India, in its third stage (Dinshaw Mistry, .2012)
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The reliable PSLV, which has had 21 consecutive successful flights, can carry 1-ton earth observation satellites to LEO. Images from these satellites have found useful economic applications in areas ranging from agricultural and environmental monitoring, to geology and urban planning. The less successful GSLV, which has failed four of its seven flights, can carry 4 ton payloads to LEO or 2 ton communication satellites to the higher Geostationary Earth Orbit (Orbit). Its successor, the GSLV Mark 3, will be able to lift 4 ton communication satellites, capable of carrying a larger number of transponders and facilitating a greater volume of communications, to GEO. It can alternatively lift an 8 ton payload to LEO. Until the GSLV and GSLV Mark 3 are proven, however, Indias space agency will use foreign launchers such as the European Ariane rockets to launch some of its communications satellites, as it has done a number of times over the past decade. (D Mistry, 2012)
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2.4.
Important Centres of ISRO
With accordance to learn about ISRO or ISAC this section will explain the various centres and setups of ISRO, their functional area and importance, which will further hep to zero in that of ISACs operations from where one can study about its budget against its performance. The ISRO Headquarters co-ordinates the overall programmes like Launch Vehicle, Satellite Communication and Navigation, Earth observation, space science, atmospheric science, space-industry development, disaster management support, international cooperation etc. (Adimurthy, V., Prasad, M. Y. S., & Shiva Kumar, S. K. 2007). Following are the major Centres/Units of DOS/ISRO responsible for carrying out research and development activities as well as for undertaking the various projects and programmes:a. ISRO Satellite Centre (ISAC)
The ISRO Satellite Centre (ISAC) at Bangalore is engaged in developing satellite technology and implementation of satellite systems for scientific, technological and application missions. ISAC is 3 functionally organised into six major areas: Mechanical Systems Areas, Digital & Communications Area, Integration & checkout area, Power Systems & Avionics Production area, Control & Mission Area and Reliability & Components Area. The Construction & Maintenance Division (CMD) of the Centre is responsible for planning, execution and maintenance of all civil works related to the Centre. Four project management teams co-ordinate the implementation of projects. Space Astronomy Group is engaged in space science activities. A new facility, ISRO Satellite Integration and Test Establishment (ISITE) including a Comprehensive
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Assembly, Test and Thermo-vacuum Chamber (CATVAC) has been set up recently (Narlikar, J. V. 2009). b. Vikram Sarabhai Space Centre (VSSC)
The Vikram Sarabhai Space Centre (VSSC) at Thumba, near Thiruvananthapuram, is the lead Centre for the development of satellite launch vehicles, sounding rockets and associated technologies. The Centre has developed expertise in aeronautics covering aerodynamics, flight mechanics, thermal analysis and structural engineering; mechanical engineering covering manufacturing technology, production and computer aided design; avionics covering control and guidance, TTC systems and on-board computers; propellants, polymers, chemicals, materials and metallurgy; propulsion and space ordnance; launch vehicle mechanism and launch vehicle design; composite materials and systems reliability. The major programmes at VSSC include: Polar Satellite Launch Vehicle (PSLV), Geosynchronous Satellite Launch Vehicle (GSLV), Rohini Sounding Rocket, Spacecapsule Recovery Experiment, Reusable Launch Vehicles, Air Breathing Propulsion, Geosynchronous Satellite Launch Vehicle (GSLV) MK-III Development and development of critical technologies for Human Space Flight (Gowariker, V. R., et.al, 1986). c. Liquid Propulsion Systems Centre (LPSC)
The Liquid Propulsion System Centre (LPSC) with its facilities located at Thiruvananthapuram (Valiamala), Mahendagiri and Bangalore is the lead Centre in the development of liquid and cryogenic propulsion engines and stages for launch vehicles and satellites. In LPSC, Valiamala, Thiruvananthapuram management of system projects,
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design activities in the area of storable, cryogenic and semi cryogenic liquid propulsion systems, electric propulsion systems, flow control components and modules and spacecraft thrusters are carried out. In LPSC, Mahendragiri, assembly and testing of storable and cryogenic liquid rocket engines and stages, spacecraft thrusters testing in sea level and high altitude conditions, storage of liquid and cryogenic propellants and production of liquid hydrogen etc. are carried out. In LPSC Bangalore, spacecraft propulsion systems design, realization and integration, mono propellant thrusters and component design, spacecraft propellant tank design and realization, electric propulsion system, managing production of propellant tank and structures for launch vehicles development and production of transducers are carried out (Mistry. D, 1998). d. Satish Dhawan Space Centre-SHAR (SDSC-SHAR)
The Satish Dhawan Space Centre (SDSC-SHAR) is the principal operational Centre for launching Sounding Rockets and Satellite Launch Vehicles. This Centre has the facilities for solid propellant processing, static testing of solid motors, launch vehicle integration and launch operations, range operations comprising telemetry tracking and command network and mission control centre. Management service group, Advanced Engineering Group, reliability and Sriharikota Common Facilities support the Centre. Apart from this, the Construction & Maintenance Division (CMD) takes care of planning, execution and maintenance of all civil works of the Centre. The Centre has two launch pads from where the rocket launching operations of PSLV & GSLV are carried out (Bhatia, A. 1985). e. Laboratory for Electro-Optics Systems (LEOS)
The Laboratory for Electro-Optics Systems (LEOS) at Bangalore is responsible for design, development and production of electro-optic sensors like earth sensors, star sensors, sun sensors, magnetic sensors, temperature sensors and optical gyros for
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spacecraft use. LEOS is also responsible for the fabrication of various types of optics for satellite cameras & radiometers and development of indigenous detectors for spacecraft. LEOS is also involved in the development of miniature sensors, Micro Electro Mechanical Sensors (MEMS) devices, development of Charge Coupled Devices (CCD), Time Delay Integration (TDI) devices with external participation (Thomas, P. 1994) f. Space Applications Centre (SAC)
The Space Applications Centre (SAC) at Ahmedabad is responsible for the development, realization and qualification of communication, navigation, earth observation & meteorological payloads and related data processing and ground systems. The Centre carries out development of ground systems and application activities in the areas of communications, broadcasting, earth observations for remote sensing of natural resources, weather and environmental studies, disaster monitoring/mitigation, etc. SAC plays an important role in harnessing space technology for a wide variety of applications for societal benefits. The activities of SAC are grouped under microwave systems, satellite communication applications, sensor developments, image and information processing and remote sensing applications. Programme planning group, systems reliability group and library and documentation group support the Centre. The Construction & Maintenance Division (CMD) takes care of planning, execution and maintenance of all civil works related to the Centre. The facilities of this Centre include the Ahmedabad Earth Station, the Delhi Earth Station, Portable & Mobile Earth Stations, Laboratories for remote sensing & communication activities, fabrication & environmental test facilities for development and qualification of space and ground hardware (Navalgund, R. R., & Singh, R. P 2009).
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g.
Development and Educational Communication Unit (DECU)
The Development and Educational Communication Unit (DECU) at Ahmedabad is involved in the conceptualisation, definition, planning, implementation and socioeconomic evaluation of innovative developmental communications in space applications. The major current activities of DECU include: Training and Development Communication Channel (TDCC), Village Resource Centres (VRC), Tele-Health (TH), Tele-Education (TE) mission and new satellite communication development and applications (Agrawal, B. C, et.al., 1986) h. ISRO Inertial Systems Unit (IISU)
The ISRO Inertial Systems Unit (IISU) situated at Vattiyoorkavu, Thiruvananthapuram carries out research and development in inertial sensors, inertial systems, navigational software, actuators & mechanisms and to realize the flight units of these system for the launch vehicle & satellite programmes and allied satellite elements. IISU is organised into research and development divisions in the areas of launch vehicle inertial systems, spacecraft inertial systems, inertial system production and reliability & quality assurance. It has facilities for precision fabrication, assembly, clean room and integration & testing (Correll, R. R. 2006). i. Indian Institute of Remote Sensing (IIRS)
Indian Institute of Remote Sensing (IIRS), Dehra Dun, under Indian Space Research Organisation, Govt. of India is a premier training and educational institute set up for developing trained professional in the field of Remote Sensing, Geoinformatics and GPS Technology for Natural Resources, Environmental and Disaster Management. The main area of the function of the Institute is capacity building through technology transfer
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among user community, education at post-graduate level in the application of Remote Sensing and Geoinformatics for Natural Resources Management and promote research in Remote Sensing and Geoinformatics. The Institute provides value-added services in the field of natural resources management, remote sensing, GIS and GPS technology. Earlier, IIRS, Dehradun, was functioning under NRSC. With effect from April 30, 2011, IIRS has been re-organised as a Unit of ISRO. Subsequently, with effect from October 31, 2011, RRSC (N), Dehradun has been merged with IIRS (Dey, S., Di Girolamo, et.al, 2012) j. ISRO Telemetry, Tracking & Command Network (ISTRAC)
The ISRO Telemetry, Tracking & Command Network (ISTRAC) at Bangalore provides mission support to low-earth orbit satellites as well as for launch vehicle missions. ISTRAC has its headquarters and a multi-mission Spacecraft Control Centre at Bangalore. It has a network of ground stations at Bangalore, Lucknow, Sriharikota, Port Blair and Thiruvananthapuram in India besides stations at Mauritius, Bearslake (Russia), Brunei and Biak (Indonesia). ISTRAC activities are organised into network operations, network augmentation, mission operation and spacecraft health monitoring,
communications & computers & control centre facilities and development projects. Programme planning and reliability groups support ISTRAC activities. ISTRAC also operates the Local User Terminal/Mission Control Centre (LUT/MCC) under the international programme for satellite aided search and rescue. An Indian Deep Space Tracking Network station at Byalalu near Bangalore for Indias mission to moon, Chandrayaan-1, has been recently established by ISTRAC. In addition, Indian Space Science Data Centre (ISSDC) and Astrosat Data Reception Centre have been established at Byalalu for archival of payload data from Indian Space Science Missions (Lee, 2010).
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k.
Master Control Facility (MCF)
The Master Control Facility (MCF) located at Hassan in Karnataka and Bhopal in Madhya Pradesh monitors and controls all the geo-stationary satellites of ISRO. MCF carries out operations related to initial orbit rising of satellites, in-orbit payload testing and on-orbit operations throughout the life of the satellites. The operations involve continuous tracking, telemetry and commanding, special operations like eclipse management, station-keeping manoeuvres and recovery in case of contingencies. MCF interacts with the user agencies for effective utilisation of the satellite payloads and to minimize the service disturbances during special operations (Baskaran, A. 2001). l. National Remote Sensing Centre (NRSC)
National Remote Sensing Centre (NRSC) located at Hyderabad is responsible for satellite data acquisition, processing and dissemination of aerial and satellite remote sensing data. NRSC has set up data reception station at Shadnagar near Hyderabad for acquiring data from Indian remote sensing satellites as well as others. The Centre is also engaged in executing remote sensing application projects in collaboration with the users (Rajashekhar, S. L., et.al. 2010).
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2.5.
About ISRO Satellite Centre (ISAC)
So far the study has covered the introduction about ISRO, and with that base this following section will deliver insight knowledge about ISAC. The establishment of Thumba Equatorial Launching Station (TERLS) in 1963 and the Experimental Satellite Communication Earth Station (ESCES) in 1967 was the prodigious precursors of Space activities in the country. Activities relating to satellite technology started in the right earnest at Satellite Systems Division at Space Science & Technology Centre, Trivandrum in the late sixties. Later when a conscious decision emerged in 1972 to build the first Indian Satellite Aryabhata the scene shifted to Bangalore with the formulation of the Indian Scientific Satellite Project (ISSP). This move was to prove propitious as the cradle of electronic industry nurtured the activity further and the space programme structured itself in to three separate components namely: Launch Vehicles, Satellites and payloads and applications. The Indian Institute of Science campus initially housed the project activities until it moved to the industrial sheds at Peenya. It was here that a handful of engineers and technicians fresh from the Universities sowed the first seeds of satellite technology in the country. With practically no prior-art existing within the country, and with sparse infrastructure put together from scratch, this young team developed the first Indian Satellite ARYABHATAin the makeshift industrial sheds at Peenya, Bangalore. With the success of the ARYABHATA mission, the fledgling space activity soon developed into a full-fledged programme with national priorities. Thus was born the ISRO Satellite Centre (ISAC) in 1976. In 1984 the Centre moved to the present 32 acre campus at Airport Road, Vimanapura in Bangalore. The main campus which houses the major fabrication and test facilities, a new 110 acre campus (ISRO Satellite Integration & Testing Establishment (ISITE) -
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established about three years back) about 8 kms away on the Marathalli outer ring road is replete with Integration and environmental test facilities under one roof namely a large cleanroom (for S/C Assembly, Integration & testing), a compact antenna test facility (CATF)-specific to communication satellites and antenna systems, a comprehensive Assembly and Test thermo vacuum chamber (CATVAC), a comprehensive Assembly and Test vibration facility (CATVIB). This facility is to enhance the throughput build of satellites, 5 communication satellites at a time. ISAC is the lead centre for design, development & integration of Communication, Remote sensing, scientific and small satellites. The activities include research & development in the area of advanced state of art technologies, total management of all satellite missions, creation of vibrant space industry for realization of space systems, Technology transfer, academia interface etc. Cutting edge technologies meeting various mission requirements are developed in the Centre keeping ISAC in the forefront of spacecraft technology frontiers. ISAC has realized till now 54 satellites (Communication & Meteorology: 22, Remote sensing: 17and others: 15) out of which 23 satellites (Communication & Meteorology: 12, Remote Sensing: 10 and others: 1) in operation and providing good service for various applications they are intended for. The 51st spacecraft is the Chandrayaan-1, a completely indigenous lunar orbiter which has shot India into International prominence as a space fairing nation capable of interplanetary missions. The Centre is fully equipped with state of the art facilities for fabrication and testing of mechanical and electronic hardware/subsystems and integrated satellite. To name a few Clean Rooms (Assembly, Integration & Testing of about 5 Spacecraft at a time),Solar panel lab (fabrication & testing), Space Simulation Chambers, Anechoic chambers and EMI
(Electrical/Mechanical interference) test facility, Vibration & Acoustic facility, Precision Mechanical & Electronics Fabrication facility, HMC (Hybrid Micro Circuits)
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&Electronics packaging facility and ISITE (AIT+CATF+CATVAC+CATVIB).[AITAssembly, Integration & Testing; CATF-Compact antenna test facility; CATVAC Comprehensive Assembly & Test vacuum chamber; CATVIB- Comprehensive Assembly &Test vibration facility.] The human resources total strength of ISAC is around 2400 with 78% technical and 22%administrative staff. The total budget outlay of ISAC is around Rs.1500/- crores per year. The following are the mission vision and goals of ISAC: Mission: Be the best Space Research Centre in India Be Competitive at a maximum value of money Be successful in all its future launches Be known as the best solution available for Space Sciences. Vision: Vision of the organisation is to make Indian globally competitive in Space Sciences & Space Research, application of Space Technology for the benefit of common man and use of outer space for peaceful purpose. Goal: The short term goal of the organisation is to succeed in the future projects.
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2.6.
Budgeting in ISAC
2.6.1. ISRO Satellite Centre (ISAC) ISAC follows a matrix organization structure. There are approximately 2500 personnel (engineers and technicians). It has R&D project groups, fabrication and test facilities, budget functional areas, independent groups, project management offices. Functional areas report to the Centres Director. The Director is assisted by the PPEG (Program Planning and Evaluation Group) for satellite projects. The auxiliary support is given by the administration group headed by the Controller. The Centre is classified into 7 major areas categorized based on the skill, expertise and activities performed which are as follows: 1. 2. 3. 4. 5. 6. 7. Digital and Communication area Mechanical System area Controls and Missions area Integration & Checkout area Power Systems & Avionics Production Area Reliability and Components area Facilities
Apart from the functional areas it also consists of the following service providing and special groups/Offices: 1. 2. 3. 4. 5. 6. 7. Program Planning and Evaluation Group (PPEG) Space Astronomy Group Computer Information Group GEOSAT Program Management Office IRS& SSS Program Management Office Space Navigation Programme Office LEOS (Lab for Electro-Optics System)
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2.7.
Group Profile
2.7.1. Program Planning and Evaluation Group The Program Planning Evaluation Group (PPEG) at ISAC has the prime responsibility to assist the director, ISAC in planning, coordinating and evaluating the managerial tasks being carried out at the centre. The group has the responsibility of Budget Management, Manpower planning, resource planning, HRD activities and advice director on selected administrative matters of the centre. Their responsibilities are overall staff support for technical and managerial planning of spacecraft programs including infrastructure buildup, resources allocation and prioritization, monitoring and evaluation functions. PPEG ensures appropriate interface between the technical and administrative wings of the centre, industry interface and technology transfers, maintaining the specialized public and coordination. In performing these tasks the group is organized into three major divisions namely:
2.7.2. PPEG Division Profile:

The projects divisions of PPEG shall develop integrated projects plans and follow up the activities with projects and groups at the required level at required intervals. Human Resource Development Division: The activities of the Human Resource Development Division can be broadly classified into: Human Resource Induction, Training and developments. Budget, Organization and methods Division : The Budget Organization and Methods division of PPEG has the major responsibility for budget planning and control, administrative efficiency by simplification of work methods
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and procedures along with office automation, infrastructure planning, costing and manpower - planning, analysis and implementing recruitment calendars. Management Information System Division : The concurrent execution of projects requires a well-conceived management information system for project implementation and management. This activity is spread in the form of project management, resource planning, budget, manpower and other support activities. PPEG is responsible to plan, implement and system support for the above activities. Safety & Security division: This division is to plan, implement and ensure safety and security measures in the Centre with respect to various standards required
2.8.
The Government of India Practice
As per the government rule/practice a statement of estimated receipts and expenditure of the government of India has to be laid before Parliament in respect of every financial year which runs from 1st April to 31st March. This statement titled Annual Financial Statement is the main budget document. The Annual Financial Statement shows the receipts and payments of Government under the three parts in which Government accounts are kept: Consolidated Fund Contingency Fund and Public Account
Consolidated Funds: All revenues received by Government, loans raised by it, money received by the government and recoveries of loans are kept. The outlays on the various
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activities of government are generally met from this fund. Demands for grants are passed by the legislature and then are incorporated in an Appropriation Act. These grants are also made department-wise in respect of each major head of account controlled by the respective Administrative Departments. No amount can be withdrawn from this fund without the authorization from the parliament. Contingency Funds: When budgets are executed, certain provisions for expenditures are found either inadequate or certain events which could not be visualized but occur as urgent and emergent items of expenditure. These are funds from which unforeseen expenditure can be met and parliament approval is taken and the amount is recouped to the account. Public Account: It records transactions relating to public money other than those of consolidated and contingency funds. PF, depreciation, revenue funds etc. are kept and transactions for these funds do not require any approval from the parliament. In a few cases, a part of the revenue of Government is set apart in separate funds for expenditure on specific objects. These amounts are withdrawn from the consolidated funds with the approval of the Parliament and kept in the public account for expenditure on the specific objects.
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2.9.
Classification of Budget in ISAC
Revenue Budget It consists of the revenue receipts of ISAC and the expenditure met from these revenues. The estimates of revenue receipts shown in the annual financial statement take into account the effect of the taxation proposals made in the finance bill. Broadly speaking, expenditure which does not result in creation of assets is treated as revenue expenditure. All grants given to other departments and other parties are also treated as revenue expenditure even though some of the grants may be for creation of assets. Capital Budget This consists of capital receipts and payments. The main items are loans raised by ISAC from public which are called market loans, borrowings by ISAC from reserve banks and other parties through sale of treasury bills, loans received from foreign ISAC and bodies and recoveries of loans granted by central Government and other parties. This also incorporates transactions in the public account.
Revenue
Capital
Income
Expenditure
Government budget allotment Market borrowing Interest receipts, dividend and (net)special deposits profits from PSU's Recoveries of loans External assistance State provident funds Small savings, etc.(net) General services expenditure Defence (including non-planned expenditure) Loans to public Interest payments enterprise Defence Capital expenditure Major subsidies
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2.10. Classification of Expenditure in ISAC

The expenditure of the ISAC can be divided into Plan and Non-Plan Expenditure. Plan Expenditure: Money allocated from the ISACs account for the Central Plan is called Plan Expenditure. This is developmental in nature and is spent on schemes detailed in the plan. E.g.: Programmes of launches, satellite building, annual planned program etc. Non-Plan Expenditure: Covers all expenditure of ISAC not included in the plan. It includes both development and non-development expenditure. Part of the expenditure is obligatory in nature, e.g. interest payment, pensioner charges, etc. Expenditure on maintaining the assets created in previous plans is also treated as Non-Plan Expenditure. Ex: Maintenance of building, launch vehicles and launch facilities etc.
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2.11. Budgeting Process at ISAC

Without Budget there cannot be any plan. Hence Budget is very essential for any organization to execute the plan for realization of the planed outlay. Hence budgeting plays a vital role in the organization. In ISAC the decade plan is formed which is further divided into five year plans. Further annual profile are generated for the five year plan and budget if formulated for the annual plans. 1. 2. 3. 4. 5. 6. 7. The Budgeting principles followed in ISAC are as follows: Annularity (Financial Year- April 1st to March 31st ) Every year the money gets lapsed or surrendered. Comprehensiveness Clear specifications/clarity for the equipment/system/activity proposed. Accuracy and Actuality Periodic review and corrective action
The inputs for preparation of the budget for the plan profile is received from the user groups which further will be reviewed by top management at various level. Budget in ISAC is classified into two types. They are Project budget and Centre budget. Programme management offices (GEOSAT Programme management Office, IRS Programme Management Office, ASTROSAT Programme Management Office, etc.) is responsible for preparing the budget requirement for the approved planned projects
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which is reviewed by Project Management Board, Programme Management Council, Additional Secretary and ISRO Council. Centre budget takes into account all the activities which do not come under the scope of Project budget like; budget provision for Technology Development Programmes, Facility Operation/Maintenance, Administrative expenditures, etc. ISAC follows different types of budget systems suiting the requirement. Project budgeting is done employing Zero Based budgeting system where as Centre budget is prepared by a combination of Zero Based budgeting system and traditional incremental budgeting system. In centre budget, activities like technology development programmes, industry interface/product ionization follow Zero based budgeting concept whereas activities like administrative expenditure, facilities operation and maintenance employ incremental budgeting techniques.
Figure 5: Annual budget process of ISAC Christ University P a g e | 70
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The Budget Formulation Cycle begins in the month of July after the issue of Budget circular from the Chairman, ISRO and Director, ISAC. For preparation of the Centre budget, the budget division which is responsible for all the budget correspondence communicates the same to the user groups with the guidelines for preparation of budget and provides necessary raw inputs to the groups about the procurement status of the indents/orders. The groups further review their requirement with respect to the guidelines and profile and formulate there budget requirement which is reviewed by Division Head and Group Director. The budget proposals are submitted to Budget Division, which holds the responsibility for reviewing the requirement of all the user groups with respect to funds reliability, authenticity and activities with respect to plan profile. Further the budget division is responsible for conducting reviews at Deputy Director and Director Level by furnishing necessary inputs for review. Once Directors approval is sought, the same is furnished to Headquarters in the form of Budget Summary Document containing all the detailed aspects budget proposals. This is further reviewed by Additional Secretary and ISRO Council member. Similarly budget for projects are prepared by Programme management offices in consultation with Programme management Council and Project Management Board, Project Directors, Deputy Project Directors of respective sub-system reviewed by Programme Director and then by Director ISAC. The proposals are further communicated to Headquarters and subjected to review by Additional Secretary and ISRO Council.
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It takes approximately two to three months to complete this activity. Hence budget proposal preparation and review shall be complete by the month of September/October. The entire process of budget preparation is as follows:
Figure 6: Budgeting Preparation of ISAC
Once the budget is approved, it is communicated to the respective user groups by generation of Approved Budget Document containing the details of the budget like, Summary of the budget for projects and Centre Activities ( enclosed as Annexure-A) line
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item wise items description, RE and BE provision for the same for each Group/division./subsystem. It also contains the details like nature of item, object code etc. This line item wise distribution of the budget helps in keeping account of the budget utilization for the identified activity. Further line items are generated separately for projects and Centre Activities.
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3.
RESEARCH DESIGN
In this chapter the research methodology used in the study is described. Items that will be addressed include the research design, a show the case study will be carried out. The methodological approach we will follow for the case study research is composed of variuos main steps as discussed below. Here for this research case study will be involved by studying the notes, documents, samples of Zero based budgeting given by ISAC and also through meeting officials and discussion on the ZBB will also be adopted to carry out the research.
3.1.
Background of the study
With growing number of scams in India with more number of irregularities in government spending, there is a huge outcall to within various groups to bring a concise rule on the spending the allocated budget and to get a review on the performance which will give a greater control over the budget. The recent columns of few national daily like The Hindu (Apr 07, 2012) and The economist (Jan 26th 2011) have highlighted the flaws in the budget system can be corrected through introducing systems like zero based system. Many economists even in the past have suggested that governments in India, both at the centre and the states, should adopt zero-based budgeting for planning their annual expenditures. Even the past governments at the centre agreed in principle that zero-based budgeting should be adopted in all the government departments (K. ViswanathaRao, 2003). This brings us to consider the importance to study the Zero Based Budgeting in ISRO since this was the first organization where ZBB was implemented and a critical analysis will provide its pros and corns which can be viewed in a larger scale when implementing in other fields of the centre or in states; public or in private; organization and individual etc.
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3.2.
Scope of the study
Zero based budgeting having being proved its importance in measuring the performance outcomes of any organization where it is applied helps to maintain the financial without adding up the left over budget of previous year thus by saying cost and giving more control to the financial team. This study will give how the implementation of ZBB have effect in ISRO/ISAC, also this will enable one to find the benefits and applicability to their own area of interest giving an insight of the ZBB. It will thus improve if any glitches being found in the organizations present budget setup.
3.3.
Research Aim
The research aim of a thesis is to deliver an absolute testimonial on what the anticipated result of the research will be (Saunders, et al, 2003) for this investigation it is as follows To analysis of Zero Based Budgeting and budgeting practice of ISRO Satellite Centre (ISAC) This will enable ISAC to clearly understand the need of changes to be made in
their organisational setup and their working systems to facilitate the optimization of the budgeting if any. This also will set up a base on which further investigation can be carried in
finding the advantages and limitations in implementation of ZBB in any other applicable field.
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3.4.
Research Objectives
The research objectives explain the purpose of undertaking the research and describe what the study hopes to achieve (Saunders, et al 2003) In order to achieve the above aim the following objectives for this thesis have been identified: To examine the of the budgeting practice of ISAC using current known theories
and models To identify the factors affecting its effective implication to check against
performance of the organization.
3.4.1. Hypothesis
As this study involves in a critical analysis of the present status of ZBB in ISAC, this study will be not involving any hypothesis, neither null nor alternative.
3.4.2. Limitations
The quality and accuracy of assessment may be compromised if the participant does not provide a valid data. Also ISAC being a highly sensitive organization with respect to publishing its data in public, it may not be providing data if the results seem to be tarnishing its brand name around its competitors, customers or stake holders.
3.5.
When to Use a Case Study Approach
According to Yin (2003) a case study design should be considered when: (a) the focus of the study is to answer how and why questions; (b) you cannot manipulate the behaviour of those involved in the study; (c) you want to cover contextual conditions because you believe they are relevant to the phenomenon under study; or (d) the boundaries are not clear between the phenomenon and context.
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3.6.
Determining the Case/Unit of Analysis
While considering what the research question will be, consideration should be given to what the case is. Although the task sound simple, but determining what the unit of analysis (case) is can be a challenging for both novice and seasoned researchers alike. The case is defined by Miles and Huberman (1994) as, a phenomenon of some sort occurring in a bounded context. The case is, in effect, your unit of analysis (p. 25). Asking yourself the following questions can help to determine what your case is; do I want to analyze the individual? Do I want to analyze a program? Do I want to analyze the Pamela Baxter and Susan Jack 546 process? Do I want to analyze the difference between organizations? Answering these questions along with talking with a colleague can be effective strategies to further delineate your case. (Krefting, L, `1991)
3.7.
Binding the Case
Once determined what the case will be, one will have to consider what the case will NOT be. One of the common pitfalls associated with case study is that there is a tendency for researchers to attempt to answer a question that is too broad or a topic that has too many objectives for one study. In order to avoid this problem, several authors including Yin (2003) and Stake (1995) have suggested that placing boundaries on a case can prevent this explosion from occurring. Suggestions on how to bind a case include: (a) by time and place (Creswell, 2003); (b) time and activity (Stake); and (c) by definition and context (Miles & Huberman, 1994). Binding the case will ensure that your study remains reasonable in scope. The boundaries indicate what will and will not be studied in the scope of the research project. The establishment of boundaries in a qualitative case study design is similar to the development of inclusion and exclusion criteria for sample
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selection in a quantitative study. The difference is that these boundaries also indicate the breadth and depth of the study and not simply the sample to be included.
3.8.
Determining the Type of Case Study
While one had determined that the research question is best answered using a qualitative case study and the case and its boundaries have been determined, then one must consider what type of case study will be conducted. The selection of a specific type of case study design will be guided by the overall study purpose. Does one looking to describe a case, explore a case, or compare between cases? Yin (2003) and Stake (1995) use different terms to describe a variety of case studies. Yin categorizes case studies as explanatory, exploratory, or descriptive. He also differentiates between single, holistic case studies and multiple-case studies. Stake identifies case studies as intrinsic, instrumental, or collective. Here in this case study Instrumental type is used to accomplish something other than understanding a particular situation. It provides insight into an issue or helps to refine a theory. The case is of secondary interest; it plays a supportive role, facilitating our understanding of something else. The case is often looked at in depth, its contexts scrutinized, its ordinary activities detailed, and because it helps the researcher pursue the external interest. The case may or may not be seen as typical of other cases (Stake, 1995).
3.9.
Single Case with Embedded Units
The ability to look at sub-units that are situated within a larger case is powerful when you consider that data can be analyzed within the subunits separately (within case analysis), between the different subunits (between case analysis), or across all of the
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subunits (cross-case analysis). The ability to engage in such rich analysis only serves to better illuminate the case. The pitfall that novice researchers fall into is that they analyze at the individual subunit level and fail to return to the global issue that they initially set out to address (Yin, 2003).
3.10. Data Sources

A hallmark of case study research is the use of multiple data sources, a strategy which also enhances data credibility (Patton, 1990; Yin, 2003). Potential data sources may include, but are not limited to: documentation, archival records, interviews, physical artefacts, direct observations, and participant-observation. Unique in comparison to other qualitative approaches, within case study research, investigators can collect and integrate quantitative survey data, which facilitates reaching a holistic understanding of the phenomenon being studied. In case study, data from these multiple sources are then converged in the analysis process rather than handled individually. Each data source is one piece of the puzzle, with each piece contributing to the researchers understanding of the whole phenomenon. This convergence adds strength to the findings as the various strands of data are braided together to promote a greater understanding of the case. Although the opportunity to gather data from various sources is extremely attractive because of the rigor that can be associated with this approach, there are dangers. One of them is the collection of overwhelming amounts of data that require management and analysis. Often, researchers find themselves lost in the data. In order to bring some order to the data collection a computerized data base is often necessary to organize and manage the voluminous amount of data.
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3.11. Analysis
As in any other qualitative study the data collection and analysis occur concurrently. The type of analysis engaged in will depend on the type of case study. Yin briefly describes five techniques for analysis: pattern matching, linking data to propositions, explanation building, time-series analysis, logic models, and cross-case synthesis. In contrast, Stake describes categorical aggregation and direct interpretation as types of analysis. Explaining each of these techniques is beyond the scope of this paper. As a novice researcher, it is important to review various types of analysis and to determine which approach you are most comfortable with. Yin (2003) notes that one important practice during the analysis phase of any case study is the return to the propositions (if used); there are several reasons for this. First, this practice leads to a focused analysis when the temptation is to analyze data that are outside the scope of the research questions. Second, exploring rival propositions is an attempt to provide an alternate explanation of a phenomenon. Third, by engaging in this iterative process the confidence in the findings is increased as the number of propositions and rival propositions are addressed and accepted or rejected. One danger associated with the analysis phase is that each data source would be treated independently and the findings reported separately. This is not the purpose of a case study. Rather, the researcher must ensure that the data are converged in an attempt to understand the overall case, not the various parts of the case, or the contributing factors that influence the case. As a novice researcher, one strategy that will ensure that you remain true to the original case is to involve other research team members in the analysis phase and to ask them to provide feedback on your ability to integrate the data sources in an attempt to answer the research questions.
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3.12. Reporting a Case Study

Reporting a case study can be a difficult task for any researcher due to the complex nature of this approach. It is difficult to report the findings in a concise manner, and yet it is the researchers responsibility to convert a complex phenomenon into a format that is readily understood by the reader. The goal of the report is to describe the study in such a comprehensive manner as to enable the reader to feel as if they had been an active participant in the research and can determine whether or not the study findings could be applied to their own situation. It is important that the researcher describes the context within which the phenomenon is occurring as well as the phenomenon itself. There is no one correct way to report a case study. However, some suggested ways are by telling the reader a story, by providing a chronological report, or by addressing each proposition. Addressing the propositions ensures that the report remains focused and deals with the research question. The pitfall in the report writing that many novice researchers fall into is being distracted by the mounds of interesting data that are superfluous to the research question. Returning to the propositions or issues ensures that the researcher avoids this pitfall. In order to fully understand the findings they are compared and contrasted to what can be found in published literature in order to situate the new data into pre-existing data. Yin (2003) suggests six methods for reporting a case study. These include: linear, comparative, chronological, theory building, suspense, and un-sequenced.
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4. 4.1. Case study
DATA ANALYSIS AND RESULTS
The case study will be explained using one sample format of zero based budgeting format of ISAC which will give an insight about the procedure that is being followed in ISAC while crafting ZBB. This will be examined against the theoretical odds that where discussed in the literature review and will be checked for the procedures that were explained by Phyrr P (1969) to bring out any changes to that of his explanation and comments will be given on the bases of the study along with scope for any improvements if needed.
From Appendix 1 the following of decision pack is used for purpose of explanation. In this case there are about four decision packages are being used to demonstrate various requirements from various departments and as how they are ranked during the final budgeting process. The following explains ever component of the decision package and its importance along with an example taken from the caser study itself.
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1.
Package Name: It indicates the name or the serial of the package that will be
easy to identify and maintain in the records. This also helps to identify during the ranking process. E.g. Z- G Fixture system: (1 of 3)
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2.
Agency: It acts as the internal department ID that generates the requirement for
budgeting process; here in this case SMG is an agency that required the budgeting being allocated. 3. Activity: The activity indicates the real-time activity that is involved on to
sanction of the budget. It is the real purpose for which the budget is being called in for. E.g. Z-G testing 4. Organization: The basic name of the organization in which the activity is being
taking place; here in this case its, ISRO 5. Rank: The rank indicate the numerical possession or the hierarchy or importance
that is given to particular decision package over the ranking process of budgeting. Here it has been left blank indicating that ranking havent been carried yet. 6. Statement of Purpose: As the name indicates, it gives the complete description
on what is the purpose of this decision package to be framed explaining its need, importance, scope etc. E.g. Deployment test for Solar Array mechanisms will have carried out under Zero Gravity conditions to qualify the total system before it is flown. Similar test would be conducted for all other deployment mechanisms used in the spacecraft. 7. Description of Actions (Operations): This explains the operations that will be
carried using the allocated budget on their area of utilization, application and beneficiation. E.g. Zero Gravity system is used for simulating Zero Gravity condition for testing and deployment mechanism of solar array to qualify the entire design of the system. The
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deployment tests would be conducted in a simulated zero gravity conditions which would be similar to space conditions. This system is to be installed in the Laboratory area made provision in the New Campus of ISAC (ISITE). 8. Achievement from Action: This is a column for forecast what the benefits that
can be reed and the achievements that will be made on operation of the sanctioned item. This helps the decision makers (managers) to study the priority during ranking process and to streamline the selections on base of priority and benefits. E.g. Integration of solar panels to spacecraft, conduct the deployment test of arrays, illumination tests of solar cells after deployment. The results achieved are recorded and analysed for the proper functioning of solar panels and cells. This allows testing of panels for 2 spacecraft simultaneously. Also this being a permanent system there will not be any need for frequent assembly, disassembly and transportation of heavy and large Zero-g elements and would reduce the handling risks near the flight model. This also has added advantage of increased capacity. It has the capacity of with larger solar panels up to 6 panels which at present is not available in ISAC. As the main guide rail beam is supported from the wall this system provides a salient advantage of having free space on the clean room floor for easy movement of the spacecraft and related group support equipment. One similar system is existing in ISAC at present and same cannot be used in both the campuses due to concurrent loads and also limitations of size. But the same cannot be used requirement is for performing the tests for 6 panels which requires higher capacity. Also cannot cater to the needs of future i.e. multi-project scenario. 9. Consequences of Not Approving Package: This indicates the possible fall outs
that may occur if the program or the process hasnt being executed or given a green signal.
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E.g. the testing of the spacecraft appendages will have to be carried out only under ZeroGravity conditions. The testing cannot be carried out under gravitational conditions of earth as the design parameters does not match. There are no other alternative mechanisms to perform these tests and hence it is a very essential system. 10. Quantitative Package Measures: This quantifies the finance that may be
required to execute the activity or to allot the budget for it. In this case it has been given as financial values are reserved 11. Resources Required: This looks out for possible resources that may be required
to complete that particular task in terms of finance, man power and other requirements (like technical) E.g. Procurement & Installation, Grants, Capital Outlay, Lease Rentals, Total People (Positions), 12. Alternatives and Cost: This indicates Different Levels of effort on executing the
budget. To find possible alternatives that may be cost effective performing same activity at various levels of the operation. This is given by the applying department. E.g. Level 1-3: Procurement, Level 2-3: Installation, Level 3-3: Operation 13. Alternatives and why rejected: This indicates the different Ways of Performing
the Same function, activity or Operation. And if it has been rejected by the budgeting committee then the reason fir why it has been rejected will be stated. 14. Sources of funds: This indicates finding out the possible source of funding that
are available for this project. Finding whether the fund have already being allocated in the annual budgeting or was it an expenditure that incurred unplanned. This helps to keep
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a check for any unplanned events that arise in middle of the financial year for those budgets havent being allocated. E.g. Operational, Grants, Capital & lease 15. Projection of Funds Committed by this package : This indicates the amount
that has been allocated for this budget after approval. This is recorded as expenses in the balanced score card. 16. 17. Reasons: A general remark column provided to record any additional comments. Approval: Indicates the approval made by various departments at various levels
of the budgeting process.
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Like in decision package, the following will be able to explain the ranking process.
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1. 2.
Department: Indicates the department that the budget is being involved for. Division: Indicates the division of the organization through which the budget
processing is been carried out. 3. Name of person Ranking Packages: Indicates the name of the person who is
involved in the ranking process. 4. Ranked by: Indicates the designation of the ranker who ranks the decision
packages. Exec. Mng., Spv, CEO, V.P., Dir. Other 5. Product, Service, or Activity: Identifies the activity for which the budget is
being devised. 6. 7. 8. 9. Current Year: Marks the current calendar year Budget year: Marks the financial year of the budget which has been planned up. Rank: Indicates the rank that has been allotted for the decision package Name/ Description: Indicates the name, code, description of the given decision
packages. 10. Level: Indicates the level of alternatives and inquiry that the proposal (decision
packages) has been through. During the study of Zero based budgeting in ISAC the below findings upturned that will give as how the ZBB have been affected the management, finance, performance, organization and vice versa
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5. 5.1.
1.
SUMMARY OF FINDINGS
Positives findings of ZBB

Changes the discussion about costs: Managers at ISAC become more cost
conscious and there are more in-depth discussions between budget authorities and departments about how money is spent. Further, budget discussions focus on more than just incremental changes in spending the entire budget is looked at with a new perspective. For example, on procurement of solar panels, as a result of their prior ZBB experience, plans to re-conceptualize how they think about panels and their alternatives services by moving towards a panel for program to program analysis of services, rather than the traditional department-wide view of major objects of expenditure (e.g., technicality, supplies, etc.) 2. Helpful for reallocating funding within a department: Case study participants
were enthusiastic about zero based budgetings ability to identify better uses of available resources within a departments budget. For example, one department came to the realization that the money being spent on company secretaries (Personal Assistants) for higher level officials (GD, VP, etc) could probably be better used elsewhere while they can be substituted through contract workers on casual labor bases. But there was far less enthusiasm when it came to re-allocating between departments. This is understandable because the ranking of decision-packages within a department provides for a reasonably objective and uncontroversial method for the former. However, ZBB provides no structured method for comparing decision-packages between departments. The Organizations that did use ZBB to re-allocate between departments tended to do so based on a more subjective, less structured determination on the part of empowered central budget authorities.
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3.
There are efficiency gains, but not systematic . The increased scrutiny applied
to inputs leads to efficiency gains. For instance, The CND department of ISAC realized that some resources were being duplicated between departments. When examining maintenance costs for office landscape that a crew for right-of-way maintenance would visit a given location to perform basic maintenance, while, at a later date, a crew for weeding/ mosquito spraying would visit the same site. The department came to the conclusion that it did not need a separate budget for spraying and that these tasks could be handled by the other crews already working at these rights-of-way. While these gains are important, in zero based budgeting, the identification of efficiency gains is a byproduct of the increased scrutiny on inputs, not the primary objective of the process. Hence, gains tend to be uneven across the organization. 4. Managers are engaged: Upper and mid-level managers have a prominent role in
building the detailed budget requests and, therefore, gain familiarity with the assumptions behind the budget. As a result, these managers better understand the financial implications of the resource-use decisions they make during the succeeding year. Managers also may gain a new appreciation of how costs are accounted for. For instance, in ISAC, the Human resource department, also as result of their examination of rights-of-way maintenance costs, came to appreciate the importance of how much it cost to service different locations in the campus of ISAC. 5. Becomes the basis for more centralized control: Unsurprisingly, central budget
authorities can learn a lot about the inputs that underlie a departments budget through zero based budgeting. This knowledge can be used to create more exacting budget-toactual variance analysis and control. The Department of Space monitors the level of inputs used by various units within ISRO in order better understand if the department will remain within budget over the course of the fiscal year, while in ISAC, the BOMD monitors the budgeting process to that of other departments of ISAC.
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6.
Good performance data is helpful to getting the most of the process:
Measures make the strategic intent behind the budget clearer. For example, a base decision- package will describe more modest objectives than a current or expanded package. The measures help decision-makers pick the level of service they want. Benchmarking might also be particularly helpful to service level budgeting as it provides additional context for selecting service levels. 7. Makes implications of cutback decisions clear: ZBB enables decision-makers
to follow a more rational cutback strategy than across-the-board cuts. This method of budgeting makes it clear what the organization will stop doing when a budget is cut. 8. ZBB moves the organization away from incremental budgeting: ZBB helps
participants think about the whole budget, not just the increments. 9. ZBB rationalizes budget cuts: Our case studies showed that users of ZBB tend
to have high confidence in their cutback decisions and often are able to avoid across theboard cuts. The service-level budgeting variety of ZBB is especially good for arraying alternative funding levels for decision makers, or, in other words, displaying the marginal utility of additional Rupees in programs. 10. ZBB makes the trade-offs between inputs and outputs more transparent:
Across theboard cuts are often associated with the view that departments will need to provide the same level of service for less money. ZBB highlights changes in what departments will provide in relation to the Rupees spent. 11. ZBB does not preclude use of other budget-balancing techniques:
Organizations that use ZBB also can use other methods of balancing the budget such as changing employee benefits, improving revenues, or seeking efficiencies in the delivery of services.
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5.2. 1.
Negative findings of ZBB

ZBB is managerially driven: ZBB, in any form, entails digging into the details
of the budget as a starting point. While there is potential value to this, as the advantages of ZBB attest, it does color the role of elected decision-makers. With the zero-line item approach to ZBB, it means that elected officials are asked to use detailed operational information in order to make their budget decisions, rather than to use the bigger-picture strategic questions to which elected officials are best suited. In the service level approach, elected officials primarily respond to staff rankings of services. Because ZBB does not necessarily include a strategic planning element, whether these rankings are reflective of elected officials priorities will depend on the extent to which staff has made an effort to understand officials priorities and integrate them into the budget process. 2. ZBB does not directly address whether the organization should be in the
business of providing a service in the first place: It largely assumes the current mix of programs and services and focuses on the level at which they should be provided. This is partially a product of the fact that the ZBB process is managerially driven (most managers would probably think the government should continue to provide their program). However, it is mainly because managers tend to concentrate on looking for opportunities to make cuts to the current way of doing things to an extent that will be acceptable to central budget authorities (e.g., find a way to cut 10%), rather than looking for ways to spend the bulk of their budget (e.g., 90%) in new ways. 3. ZBB is more effective when good performance measures are in place:
However, few departments within the organization of ISAC have a detailed, quantified understanding of what their service levels are, much less of the relationship between service levels and cost. Hence, they cannot accurately select a service level and then
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estimate the cost for that new service level. Rather, they tend to budget by inputs, and then estimate service impacts at different input levels. While lack of good performance measures will be a drag on any budget process that looks to introduce more objective performance information into resourcing decisions, it can be particularly problematic in ZBB. This is because ZBB is predicated on the assumption that decision-makers will be able to make choices between detailed service level options, which then will drive resourcing decisions. A lack of good measures to support decisions means that ZBB is less likely to result in serious examination of significantly different ways of providing service. 4. ZBB is perceived to require too much paperwork: In this case study
departments rarely cited paperwork as an important problem in practice, likely because they were using a modified, streamlined approach to ZBB. However, the perception is important because it elicits resistance. This challenge is most acute when ZBB is rushed into place in response to financial distress because insufficient planning and preparation result in a less clear and harder to follow process. It is important to note, though, that even modified ZBB does require substantial documentation and what is deemed excessive is often relative. 5. ZBB doesnt address alternative service delivery options: In theory, ZBB does
allow and even encourages managers to submit decision-packages for alternative service delivery options (i.e., entirely different methods for achieving the same outcome). However, this very rarely works in practice. Because the ZBB process is intensive, departments are unlikely to seriously think about alternatives at the same time as putting together spending plans. Also, ZBB assumes that managers of departments will know the best means of delivering a service. This means that ZBB is really more about managerial preferences than true alternatives. In many cases, managers are likely to believe that
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theyve been doing the right things all along, so will concentrate on doing more of the same. Finally, the environment of financial austerity that is often associated with ZBB is not generally conducive to the risk taking associated with proposing alternatives. For instance the case study of decision packages of ISAC in Appendix 1 reveals that none of those packages carried an alternatives method. 6. ZBB doesnt directly address efficiency of services: Making inputs more
transparent doesnt make for more efficiency by itself. Increased scrutiny on inputs may inspire some cost saving innovations on an ad hoc basis, and reducing budgets will force managers to think of better ways to use their more limited resources, but these are secondary effects. This is important to understand because finding efficiencies is a common motivation for adopting ZBB. Recognizing this problem, some of ISAC have adopted efficiency enhancing programs alongside of ZBB (e.g., an employee suggestion program, managed competition). 7. Only partially addresses service levels: Zero based budgeting is focused on
inputs. The detailed discussion of inputs does help make it clearer that cutbacks will have service implications, compared to using more general, across-the-board cuts. Also, including a narrative of department goals along with the budget submission helps put the budget requests into context. However, the detailed selection of different service options contemplated by ZBB theory is absent hence, ZBB does not provide a great deal of initial insight into the results obtained through company spending. 8. Decision-packages have to provide detailed service level choices: The decision
packages presented by decision-units have to be sufficiently granular to allow for meaningful selection between different service levels, and not present an all-or nothing decision.
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9.
Articulating service levels may be difficult: Managers rarely have a clear
understanding of the relationship between service inputs/costs and outputs (much less outcomes). Hence, translating service levels that are different from what is provided currently into Rupee amounts (in some cases it is in Rupees whil e in others its in Dollars) can be a challenge. 10. Efficiency is not addressed directly: Service level budgeting of ZBB does not
encourage efficiency directly. Managers are not provided incentives to be more efficient and the ability to propose different service levels does not produce efficiencies either. To the extent efficiencies are realized, they are more likely be a by-product of reduced budgets and the resulting a need for managers to find ways to get along with reduced funding. 11. Often connected to strategic planning: A weakness of the theoretical model of
ZBB is that it does not have a strong tie to organization-wide strategy spending strategies are coming from the bottom up, rather than the top down. Practitioners of service-level budgeting often mitigate this weakness by developing an organizationwide strategic plan and using that as guidance for formulating a final budget recommendation to the governing board. However, there tends to be loose connection between the ZBB process and the strategic plan the strategic plan helps central budget authorities to put selection of service levels into context, but the plan is not translated into a structured method to guide departments in developing decision- packages.
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6. 6.1. Conclusion
SUGGESTIONS AND CONCLUSION
In the early 1920's A. E. Buck said that a good governmental budget should go through formulation, determination, and execution. This is true even today. As we trace the history of public budgeting through performance budgeting, incremental budgeting, planning programming and budgeting, and now zero-base budgeting, we find that this is always the goal or desired end result. There is no substitute for a good and proper technique. The need for an effective budget procedure is increasingly apparent in business enterprise in the face of apparelling operating costs and declining growth rates. All enterprises therefore are compelled to an environment in which the allocation of resources is constantly exposed to challenges with corporations facing decreasing profits and increasing pressures to hold down prices and with government striving against increasing demand and cost of services. The ZBB is a strong and effective tool of the management with the help of which a firm base for sound planning, operational, review and control system for each and every phase of organisations activities can be evolved to achieve objectives result. Zero-base is simply another attempt to achieve this goal. But ZBB is just as doomed to failure as were the other techniques if a rational and systematic method of approach is not used. All public agencies are not the same and cannot be forced into the same budget mould. If we use the zero-base approach logically and adjust it to fit the situation at hand, we could achieve the desired result of a properly prepared and implemented budget. However, if we plunge in without knowledge or consideration of ZBB's short falls, as well as its positive aspects, the process is, from the beginning, doomed to failure.
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Like most budget reforms that promise to bring more rationality and comprehensive decision-making to cut-back budgeting, zero-base budgeting has limitations. Budget is always art as much as it is science, and it is up to public officials to decide the extent to which ZBB, or at least elements of it, facilitates the presentation of financial and service information to decision-makers in a way that will help them reach a structurally balanced budget that meets the needs of the community. Most participants in the case study believe that a learning curve effect will result in decreasing time and effort required in the budget preparation state. It is also believed that a learning curve affect will enhance the usefulness of the information provided as the participants become more familiar with the zero-base budgeting process. As the system evolves, a number of the challenges cited will be resolved thereby improving the system as an important tool of management.
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6.2.
Recommendations
Based on the study of Zero based budgeting of ISAC and meetings with executives; I would make the following suggestions for betterment of Zero Based Budgeting in ISAC successfully: 1. Proper awareness campaigns and programs on ZBB and its progressive effects
must be delivered to all the employees those who are involved in the process of budgeting and outcome. 2. The departments that are not related to budgeting and finance must be made to
handle internal budget in the form of ZBB so that it can also be easier to review and implement by the budgeting and finance division. 3. Top management of ISAC must be completely committed to the adoption of zero
base budgeting 4. Zero base budgeting should be projected primarily as a resource planning and a
redeployment process rather than simply as a cost reduction and a cost control exercise meant to curb non-essential activities 5. Adequate thought must be given to the likely human problems by educating the
executives and staff about its utility and allaying unnecessary concerns about the possibility of reduction in employment and dislocation of work. 6. As staff appointments and salaries cannot be reduced in ISAC or in ISRO, it
would be better if an assurance is given that no retrenchment will be made 7. Monitoring cells should be set up at the head office as well as the sub offices for
implementing and resolving problems in implementation
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8.
The Directors, Deputy Directors, deputy chief officers, chief officers, and
managers must be trained in the procedures for constructing decision packages and making the ranking decision so that personal biases affecting the benefits of the system are avoided 9. Finally, it is desirable to select two to three departments every year for making a
zero base review so that each department gets appraised once in four to five years.
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Zero Based Budgeting in ISRO

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Zero Based Budgeting in ISRO

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Zero Based Budgeting: A critical analysis on budgeting practice of ISRO Satellite Centre (ISAC)

Rationale for the Investigation

1.3.2. History of budget

1.3.3. Type of budget

Figure 1: All types of budgets involved in a typical organization

1.3.5. Types of budgeting

Target-Based Budgeting (TBB)

Planning, Programming and Budgeting System (PPBS)

1.3.6. Budgeting process

Figure 2: Common hierarchical form of the budgeting process

Zero Base Budgeting

1.4.2. Main ideas of the method

request and profit and loss account. d. Allocate resources accordingly.

Figure 3: The detailed process of decision packages sources: (ibid., p. 114):

1.4.3. Advantages and disadvantages of ZBB

1.4.4. Practical use of ZBB

Article reviews on ZBB Broadnax, Walter D

Stonich, Paul J. and Frederick W. Harvey

Minmier, George Samuel.

2.1.1. History of ISRO

The Aim and Vision of ISRO

The Space Programmes

Important Centres of ISRO

Development and Educational Communication Unit (DECU)

Master Control Facility (MCF)

About ISRO Satellite Centre (ISAC)

2.7.2. PPEG Division Profile:

The Government of India Practice

Classification of Budget in ISAC

2.10. Classification of Expenditure in ISAC

2.11. Budgeting Process at ISAC

Figure 5: Annual budget process of ISAC Christ University P a g e | 70

Figure 6: Budgeting Preparation of ISAC

Background of the study

Scope of the study

performance of the organization.

When to Use a Case Study Approach

Determining the Case/Unit of Analysis

Binding the Case

Determining the Type of Case Study

Single Case with Embedded Units

3.10. Data Sources

3.12. Reporting a Case Study

4. 4.1. Case study

DATA ANALYSIS AND RESULTS

of the budgeting process.

Positives findings of ZBB

Good performance data is helpful to getting the most of the process:

Negative findings of ZBB

Articulating service levels may be difficult: Managers rarely have a clear

SUGGESTIONS AND CONCLUSION

implementing and resolving problems in implementation

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