Outcome budgeting or Outcome based budgeting(OBB) is an method of budgeting that measures the progress of each department and ministry and what they have done with its budget. 

Outcome budgeting is an process of budgeting done at micro levels that sets the measurable targets to be allocated for every planned project. It establishes the link between the fund spent by a government and the outcome that follows. It also helps in measuring the quantitative and qualitative aspects of the budget, and makes it transparent. 

What is the need for Outcome based budgeting?

The major need for outcome based budgeting is that the developing country needs to have an increased targets that is needed to be achieved especially in various sectors. It provides absolute improvements in performance and helps in long-term planning.

What are the advantages of Outcome based budgeting?

There are several advantages of outcome based budgeting:

• It increases the transparency and participation in the budgeting process that enables the stake holders to recognize the links between the funds allocated and proposed outcomes. 
• It helps to reduce costs by identifying budgets that do not contribute to the outcomes and focuses on the areas where the investments can be useful and effective.
• It promotes coordination and cooperation among various departments and government agencies.

Outcome based budgeting is crucial and it gives improvements to the performance of different departments and ministries and helps in planning and it brings effectiveness in implementing the budget.

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