The Government of India is preparing to present an interim budget on February 1, 2019. An interim budget is presented in an election year by the government and is not a full budget. During an interim budget, Parliament passes a vote-on-account to allow the government to meet its expenses. Also, the interim budget comprises accounts of both expenditure and receipts of the government.
Since the Lok Sabha polls are due later this year, the government will present an interim budget. A full-fledged budget will be presented by the incoming government in July. Union Minister of Finance Arun Jaitley has however hinted that this will not be a mere vote-on-account.
Here are few quick points about the interim budget.
- Interim budget is presented by the government and sent to Parliament for an approval.
- Approval of the budget grants the government spending rights till the end of the financial year.
- If general elections are near, the government goes for a vote-on-account, which is approved by Parliament. An approval allows the present government to meet their expenses before the full budget by the incoming government.
- Usually, the government doesn’t announce big-ticket tax reforms and new policies through the interim budget.
Interim vs. Union Budget
- The union budget is generally for full term of 12 months, while interim budget is just for a few months.
- Tax reforms, new policies, and schemes are announced in the union budget, which can affect the finances of the government.
- The union budget is also known as the Annual Financial Statement and is also a financial declaration made by the government that lists out the estimated expenditures and receipts of the government for a particular financial year. According to Article 110 (a) of the Constitution, a finance bill is to be mandatorily presented with the budget.
- The Parliament approves this finance bill for one fiscal year. Post getting approved, the finance bill becomes the Finance Act.
It is important to note here that constitutionally there is no rule that can stop the outgoing government in announcing tax changes and new policies in the interim budget.
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