The Full Form of PBB is‍ Performance Based Budgeting.

Performance-based budgeting is the practice of developing budgets based on the relationship between program funding levels and expected results from that program. The performance-based budgeting process is a tool that program administrators can use to manage more cost-efficient and effective budgeting outlays.

The traditional approach to budgeting focuses on incremental changes in detailed categories of expenditures. Performance based budgeting (PBB) differs by focusing on results rather than money spent. The basic principle of PBB is accountability, not merely on compliance with law and previous funding decisions. Performance based budgeting encourages lawmakers to reconsider priorities and grants agencies the flexibility to make decisions that are not easily permissible under traditional budgeting systems. This brief provides an overview of performance based budgeting and resources for further information.

A performance budget has the following characteristics:

• It presents the major purpose for which funds are allocated and sets measurable objectives.
• It tends to focus on changes in funding rather than on the base (the amount appropriated for the previous budget cycle).
• It identifies programs and agencies that are seeking similar outcomes, thereby drawing such inter-relationships to the legislature’s attention.
• It offers agencies flexibility to reallocate money when conditions merit, rewarding achievement and possibly imposing sanctions for poor performance.