Sitharaman clarified that the February 1, 2024, Budget would only serve to meet the government’s expenditure until a new government is formed due to the upcoming elections!
Union Finance Minister Nirmala Sitharaman is slated to present the interim Budget for the fiscal year 2024-25 on February 1. This Budget will serve as a provisional financial outline until the new government is formed after the general elections, with the full budget expected in July 2024.
Sitharaman emphasized that this Interim Budget would not include any “spectacular announcements” but would be a “vote on account.” A vote on account, or Interim Budget, is a customary practice before elections, outlining anticipated receipts and expenditures for the transitional period until the new government takes charge.
In contrast to a comprehensive full-fledged Budget, which encompasses all aspects of government finances and outlines economic strategies for the entire fiscal year, an Interim Budget is more focused on immediate financial requirements during the transitional phase. Major policy announcements are traditionally avoided during a vote on account, although there is no constitutional prohibition against substantial announcements.
The Interim Budget, also known as a ‘vote on account,’ functions as authorization for specific expenditures necessary until a new government assumes office. However, the Election Commission of India imposes limitations to prevent undue influence on voters. The government is restricted from proposing significant taxes or policy reforms during this budget to ensure fairness in the electoral process.
Sitharaman clarified that the February 1, 2024, budget would only serve to meet the government’s expenditure until a new government is formed due to the upcoming elections. Prior to a vote on account, governments refrain from presenting the customary pre-budget ‘Economic Survey,’ which traditionally accompanies the full budget presentation in July. The Economic Survey provides insights into the economic state and key events.
According to Article 116 of the Constitution, a vote on account signifies an upfront allocation from the ‘Consolidated Fund of India,’ specifically designated for addressing immediate expenditure needs. This fund includes all revenue generated by the central government, such as taxes and interest on loans. Typically effective for two months, a vote on account can be extended if necessary.
This article was originally published on DNA India News
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