A major limitation of incremental budgeting is that it:

Type: MCQ • Marks: 1

A. May perpetuate inefficient expenditure patterns by using previous allocations as the baseline

B. Completely ignores historical expenditure

C. Prevents any predictability

D. Cannot be used by governments

Explanation

Incremental budgeting generally modifies previous allocations marginally, potentially preserving outdated or inefficient programmes.

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UPSC Principal & Vice Principal Management Finance Administration

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