An interim budget or is presented during an election year. Like it was done in February 2019. Since the then Union Finance Minister Arun Jaitley was away for treatment in the United States, the Railway Minister Piyush Goyal was given additional charge of Finance Ministry. Goyal presented the interim budget of the Narendra Modi government. Hence, the ruling Government announced an interim budget or vote on account in February. This is followed by a full budget by the new Government. The new government led by Narendra Modi will present the Union Budget on 5 July.
Interim Budget: It is essentially a report card on the income and expenses made in the previous year. It is presented a few months before the election during which a code of conduct is put in place.
The interim budget mentions the proposed expenses likely to be made in the next few months until the new government takes charge. There is no proposal on the income part of the budget through the collection of taxes. This procedure called Vote on Account. It seeks the approval of the Parliament. Once the approval is obtained, the funds for these expenses are then debited to the Consolidated Fund of India.
Vote on Account: A 'Vote on Account' deals only with the expenditure side of the government's budget. An interim budget is a complete set of accounts, including both expenditure and receipts. An interim budget gives the complete financial statement, very similar to a full budget. While the law does not disqualify the Union government from introducing tax changes, normally during an election year, successive governments have avoided making any major changes in income tax laws during an interim budget.
Union Budget: The Union Budget is the annual financial statement that contains the government’s revenue and expenditure for a fiscal year. The statement details the revenues from all sources, and expenditure on all activities that the government will undertake for the fiscal year. The fiscal year is calculated from 1 April-31 March.
The budget contains the revenue and capital budget. A revenue budget comprises of all the revenue expenditure and receipts of the government. If the revenue expense is in excess of the receipts, the government suffers a revenue deficit. The capital budget consists of government-related capital receipts and payments. It includes investments in shares, loans and advances granted by the central government to state governments, government companies, corporations and other parties.
Updated Date: Jun 21, 2019 16:12:32 IST