The interim budget for the fiscal year 2024-25 is scheduled to be presented by Union Finance Minister Nirmala Sitharaman on February 1. The complete budget for the same fiscal year will be unveiled once the new government is formed subsequent to the general elections. In December of the previous year, Sitharaman dismissed the possibility of any “remarkable announcement” for her sixth budget, scheduled for February 1 this year. She clarified that it would merely be a “vote on account” ahead of the general elections.
“Spectacular announcements are not made during a vote on account. Therefore, you will need to be patient until the new government takes charge and presents the comprehensive budget in July 2024,” responded the minister when asked about the possibility of a “supercharged budget” at the CII Global Economic Policy Forum. In 2019, Piyush Goyal, assuming additional responsibilities in the finance ministry due to Arun Jaitley’s illness, delivered the last interim budget. Following the successful reelection of the Narendra Modi-led government, Nirmala Sitharaman was appointed as the finance minister, and she presented the complete budget on July 5, 2019.
How is an Interim budget different from a full-fledged Budget?
The Interim Budget is designed to outline the government’s projected revenues and expenditures until the formation of the new government. In contrast, a comprehensive Budget encompasses all aspects of government finances, including income, spending, allocations, and policy announcements. A full-year Budget serves as a strategic roadmap, delineating the nation’s economic trajectory for an entire fiscal year. On the other hand, the interim budget provides financial details for the transitional period.
Anticipating Lok Sabha elections around April-May 2024, the incoming government is expected to present a complete Budget in July 2024. On February 1, Sitharaman will present an interim budget for the fiscal year 2024-25 in Parliament, effective from April 1, 2024. Historically, significant policy declarations have been refrained from during a vote on account, even though there is no constitutional restriction against making substantial announcements.
Also called a ‘vote on account’.
Traditionally, an Interim Budget, also referred to as a ‘vote-on-account,’ serves as an authorization for incurring specific expenditures necessary until a new government assumes office. Interim budgets are subject to certain limitations imposed by the Election Commission of India to prevent any undue influence on voters. The government is restricted from proposing significant taxes or policy reforms in the budget, as such actions could potentially sway voters in favor of the ruling dispensation.
“I won’t be a spoilsport, but it’s a fact that the budget slated for February 1, 2024, will essentially be a vote on account due to the ongoing election mode. The government’s budget presentation will primarily aim to cover its expenditures until a new government takes charge,” Sitharaman remarked in December.
Before the vote-on-account, governments also refrain from presenting the customary pre-budget ‘Economic Survey,’ a tradition usually observed a day before the full budget presentation. This survey, which outlines the economic state and key events, is typically presented alongside the complete budget in Parliament in July. Typically, a vote-on-account remains effective for a duration of two months, with the possibility of extension if necessary.
As per Article 116 of the Constitution, a vote-on-account signifies an upfront allocation to the government from the ‘Consolidated Fund of India,’ specifically designated for addressing immediate expenditure needs. The Consolidated Fund of India encompasses all revenue generated by the central government, including taxes, interest on loans, and other such collections.
