Zero-Base Budget is a budgeting method where every expense must be justified from scratch for each new period.

Unlike traditional budgeting (which starts with last year’s budget and adjusts it), Zero-Base Budgeting starts from zero. This means no expense is automatically approved — every department must explain why the money is needed and how it adds value.

Simple Example:

If a company spent ₹5,00,000 on marketing last year, in Zero-Base Budgeting, it cannot simply repeat that amount. It must justify why ₹5,00,000 (or any amount) is necessary this year.

Key Features:

Starts from zero

Every expense must be justified

Focuses on cost control and efficiency

Eliminates unnecessary spending

Easy Definition for Exams:

Zero-Base Budgeting is a budgeting technique in which all expenses must be justified for each new period, starting from a zero base.

If you want, I can also give:

A 2-line ultra short definition (for quick revision)

Advantages & disadvantages section

Comparison with traditional budgeting (SEO friendly format)