A state health department adopts a budgeting method in which every line item must be justified afresh from a base of zero in each annual cycle, rather than adjusting the previous year's figures incrementally. This approach is known as:

• A Zero-based budgeting ✓
• B Performance budgeting
• C Programme budgeting
• D Line-item incremental budgeting

Explanation

Zero-based budgeting requires that each activity be justified completely from zero every budgeting period, forcing managers to reassess priorities instead of perpetuating historical allocations. Programme budgeting allocates funds by objective or programme area, performance budgeting links money to measurable outputs, and line-item incremental budgeting is precisely the traditional approach that zero-based budgeting was designed to replace.

Reference: Park's Textbook of Preventive and Social Medicine, 27th ed.

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