Finance Minister Nirmala Sitharaman is set to present an interim budget on February 1, 2024. Since general elections are scheduled this year, a full budget will be presented after the new government takes over.
Here's what the interim budget means and why it will be presented instead of a regular budget, this year.
What is Interim Budget?
An interim budget is a temporary financial statement by the government, which is presented during an election year. Unlike a full annual budget, the interim budget is used to cover a shorter period until a new government is formed after the elections.
This budget includes an account of the government's income and expenditure for part of the fiscal year. It allows the government to meet its expenses until the new government presents the full budget.
Difference Between Interim Budget And Full Budget
Interim budget is presented when the government is close to the end of its term or during a period of transition. The primary purpose of an interim budget is to ensure the continuity of government expenses and operations until a new government is formed or until post-election when the full budget can be presented. It's like a temporary budget.
The full-year budget is a comprehensive financial plan of the government's finances for the entire fiscal year. It includes detailed information about the government's revenue and expenditure, policy initiatives, economic projections, tax proposals, and other financial matters. This budget is usually presented annually and outlines the financial and economic agenda of the government for that year.
Interim Budget: Inclusions And Exclusions
The interim budget includes projections for government expenditures, revenue, fiscal deficit, overall financial health, and prospects for the upcoming months.
The interim budget does not contain major policy proposals or tax changes as it is more about the smooth operation of the government rather than introducing new policies or major financial changes.
How is the Interim Budget prepared?
The Interim budget is presented in Parliament by the Finance Minister. Like the regular budget, the interim budget is followed by discussions and debates in both houses of the Parliament - the Lok Sabha and the Rajya Sabha.
The Lok Sabha must pass the interim budget, while the Rajya Sabha can discuss and suggest amendments, but these are not binding on the Lok Sabha.
The key element of an interim budget is the vote-on-account. After the general elections, the newly elected government may choose to present a full budget, replacing or modifying the interim budget.
What is 'Vote On Account'?
The interim budget includes a "vote on account" for operational expenses. Essentially, vote on account is the approval for government spending for a part of the fiscal year.
When will the Interim Budget be presented?
Finance Minister Nirmala Sitharaman will present the Interim Budget on February 1, 2024, at 11:00 AM.
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