The Finance Minister is all set to present her sixth Budget in a row and since it is a general elections year, the government will be allowed only to present an Interim Budget or Vote-on-account instead of a regular full Budget.
About Interim Budget vs Vote-On-Account
- An interim budget serves as a framework for managing provisional expenditures over a short duration, usually spanning a few months, until a new government takes office at the central level.
- An interim budget generally includes the current state of the economy, plan and non-plan expenditures and receipts, changes in tax rates, revised estimates of the current financial year, and estimates for the coming financial year.
- Despite being presented for the entire year, similar to a regular budget, the interim budget is subject to constraints imposed by the Election Commission.
- These constraints aim to prevent the government from implementing policies that could unduly influence the general public before the commencement of voting.
- The Parliament passes a Vote-on-account to meet essential expenditures such as salaries of central government staff, funding of ongoing projects, and other government expenditures.
- In other words, it accounts for only expenditures to be borne by the outgoing government for a period of two months, which may be extended to four months on special circumstances.
- The interim budget serves as a financial plan during a transitional period, typically when there are only a few months left in the current government's tenure. The vote-on-account can be approved within the framework of the interim budget.
- Like a full budget, an interim budget will be discussed and passed in the Lok Sabha, and in the case of a vote-on-account, it will be passed without any formal discussion as such.
- An interim budget can propose changes in the tax regime, whereas a vote-on-account cannot change the tax regime under any circumstances.
- Vote-On-Account is a parliamentary approval for withdrawing money from the Consolidated Fund of India from April to June/July or until the new Government presents its full-fledged budget.
- It can be termed an advance grant, interim arrangement, and authorisation for the outgoing government to draw the money from the above-said fund and meet short-term expenditures.
- As far as validity is concerned, the interim budget is valid throughout the year whereas the vote-on-account is valid only for a period of two to four months.
Q1) What is the Election Commission of India (ECI)?
The Election Commission of India (ECI) is an autonomous and permanent constitutional body responsible for organizing free and fair elections in the Union and States of India. The Constitution grants the ECI with the power of direction, superintendence, and control of elections to Parliament, state legislatures, the office of president of India and the office of vice-president of India.