Budget 2018: All you need to know about Vote on Account

In February 2014, the then finance minister P Chidambaram presented an interim budget or a Vote on Account, as it is also referred to, instead of a full budget because General Elections 2014 were scheduled in May. In an election year, the budget may be presented twice — first to secure Vote on Account for a few months and later in full. On 1 February, Finance Minister Arun Jaitley will be presenting the last full budget of the 16th Lok Sabha led by Narendra Modi before the General Elections 2019. Let’s take a look at what do these two budgets signify: [caption id=“attachment_2643018” align=“alignleft” width=“380”] Representational image. Reuters[/caption] Annual budget  The Union Budget is nothing but an annual financial statement under which the government lays out its policies, allocates funds for various governmental activities and gives a statement on the estimated receipts and expenditure for that particular financial year. The government has to present an annual budget for every financial year because it can’t borrow and spend money on whims and fancies. Since the resources are limited, the government needs proper budgeting. The annual budget keeps the account of the government’s finances for the fiscal year that runs from 1 April to 31 March. Interim budget An interim budget refers to the budget of a government that is going through a transition period. An interim budget is presented primarily to enable the various departments of the government to continue incurring their expenditure until a regular budget is passed by the new Parliament, says this Rediff report. The process of one political party coming to power and the other vacating the office is vital to democracy. It is common that a new government and the old one might have different fiscal plans, so the old government’s budget is cut short and a new budget is created. And that’s where interim budget or Vote on Account comes into the picture. According to News18, an interim budget helps span the transition time between two governments so that the various departments of the government can continue to function. It also offers time for a new government to create its own budget plan. An interim budget or Vote on Account is usually taken for two months only. However, during election year or when it is anticipated that the main Demands and Appropriation Bill, which gives authority to the government to incur expenditure from and out of the Consolidated Fund of India, will take longer time than two months, the Vote on Account may be for a period exceeding two months, says Parliament of India’s official website. Difference between interim budget and annual budget The major difference between an interim budget and an annual budget is the time period. Interim budget deals with seeking the Parliament’s nod for the expenses proposed to be made in the next few months. The government does not announce any sops in an interim budget and there is no talk about generating income through taxes also, according to this Rediff report. According to Moneycontrol, an interim budget is different from an annual budget as the former deals only with expenditures while the latter is a complete set of accounts, including both expenditure and receipts.