A budget is the total projected costs needed to complete a project over a defined period of time. It’s used to estimate what the costs of the project will be for every phase of the project.
The budget will include such things as labor costs, material procurement costs and operating costs.
On the programme level, once the funds are allocated to a project they are “locked” in that project and cannot be released until after project closure. This means that these funds cannot be used to get other projects started, and the funding is ‘parked’ and useless. As a result, the Government of India has created a number of mechanisms to ensure that if money is committed but remains unused for a number of years,
the projects and/or programmes concerned will have their budgets cut and lose all rights to the unused funds.
This makes it essential that projects provide reasonably accurate spending forecasts. Spending under target because genuine cost savings have been achieved is of course a good thing.
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