With the General Elections scheduled this year, the Union Government can not deliver a full-fledged budget, so it will be an interim one.

Last month, Finance Minister Nirmala Sitharaman had announced that the upcoming Budget will be a vote-on-account and there will be no spectacular announcement as the government will be in election mode.

Advertisement

According to Article 116 of the Indian Constitution, Vote on Account is a grant in advance for the Central government to meet short-term expenditure, generally lasting for a few months till the new financial year starts.

When an outgoing government seeks interim permission from Parliament to withdraw funds from the Consolidated Funds of India and spend that on expenditures and important government schemes for a few months until a new government is formed, it is called a vote on account.

During an election year, the incumbent government cannot present a full Union Budget. Hence, an interim budget is announced with projections only for the upcoming three-to-four months instead of the entire fiscal year.

Interim budgets typically have several constraints imposed by the Election Commission. This is done to ensure that the government doesn’t implement policy changes that could unduly influence the general public in voting for the general election.

An interim budget contains both the revenue and expenditure details for the period until the new government takes over and presents a full budget. On the other hand, a vote on account includes only the government’s expenditures.

The last vote on account, or interim budget was presented back in 2019, by Piyush Goyal, who held the additional charge of the Finance Ministry, and maintained the common pattern, with only two big-ticket announcements being the Income Tax rebate and PM Kisan Samman Nidhi Yojana Yojana.

A full financial year Budget will be presented by the government which comes to power after the 2024 Lok Sabha elections. That Budget is likely to be presented sometime in June or July.

While the interim budget may not have any major announcements, many expectations have started pouring in, but the anticipation is for increased allocation to education, health, and technology.