Difference Between Interim Budget And Full Budget: All You Need To Know

Budget 2024 Presentation by Finance Minister Nirmala Sitharaman has been scheduled for February 1, 2024. As the Lok Sabha elections are scheduled for early next year, it will be an interim Budget. Here's everything you need to know.

Significance of Interim Budget

An interim budget is presented by the government when general elections are looming or a new government is about to take office. It serves as a provisional arrangement to meet the expenditure needs of the government for a short period until a new government can formulate and present a full-fledged budget, according to News18.

Temporal Constraints on Union Budget

The validity of a Union Budget extends until the end of the financial year on March 31. Therefore, the government has spending rights only until that date. For government expenditures occurring between March 1 and the formation of a new government, the incumbent government needs permission from the Parliament to incur costs in the interim period. Consequently, the interim Budget is released, as reported by News18.

Components of Interim Budget

The interim budget typically includes estimates of expenditure, revenue, fiscal deficit, financial performance, and projections for the upcoming financial year of the incumbent government. However, it cannot include any major policy announcements. According to the Election Commission's code of conduct, an Interim Budget cannot incorporate any major schemes as it may influence the voters. The incumbent government is not supposed to present the Economic Survey with the interim Budget.

Vote on Account

A vote on account is passed by the Parliament through the Interim Budget to meet essential government expenditures such as salaries and ongoing expenses in various sectors before the general elections. It is passed as a convention without any discussion and is usually valid for up to two months but can be extended.

Distinguishing Features of Interim Budget and Vote on Account

Major differences between an Interim Budget and a Vote Account include the fact that an Interim Budget consists of both expenditures and receipts, whereas vote-on-account lists only the expenditures borne by the government, reported News18.