There are only hours left for Finance Minister Piyush Goyal to announce the Interim Budget for 2019-20, which will seek Parliament's approval for spending for four months till a new government is sworn-in. The new government, which will take office after the general elections due by May, is expected to present a full Budget in July along with the Economic Survey.
As per practice, an election year has a Vote on Account — approval for essential government spending for a limited period — and a full-fledged Budget is presented by the new government.
While P Chidambaram, the finance minister during the UPA term, had presented the previous government's Vote on Account in February 2014, Finance Minister Arun Jaitley presented a full Budget in July that year.
In 2018, the Modi government scrapped a colonial-era tradition of presenting the Budget at the end of February. It is now presented on 1 February so parliamentary approvals can be completed before the next financial year starts.
What is a Vote on Account?
A Vote on Account is a formal request by the government to Parliament to allow it to utilise the Consolidated Fund of India for meeting its expenses till the elections.
The Consolidated Fund of India refers to the earnings of the government, as per the Constitution. Before each election, Parliament votes to allow the outgoing government to meet regular administrative expenses, including the salaries of government employees, loan interest payments, subsidies and pensions.
As the government will be in transition soon after the Vote on Account is sought, such a Budget does not present a full picture of the expected income and expenditure for the whole financial year. It only lists expenditures.
Vote on Account versus a full Budget
A key point of difference between a Vote on Account and a full-fledged Union Budget is that the former is only valid for two months (or until the new government presents its Budget), while the latter is for a whole year.
A Vote on Account traditionally does not include announcements on new schemes, sops or taxes as the new government's stance on these financial issues could differ from that of the outgoing one. A pre-poll projection of income and expenses for an entire year is traditionally considered improper as it imposes policy changes or budgetary constraints on a government that may not be open to them.
To the average citizen, a Vote on Account means no significant shift in the existing tax structure, as that would require amendments to the Appropriation Bill. There will, therefore, be no decrease or increase in the income tax you pay but only minor changes to indirect taxes.
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Updated Date: Feb 01, 2019 10:05:54 IST