Understanding interim budget

PM Modi led NDA government is gearing up to present this year's budget as elections are round the corner

GN Bureau | January 21, 2019


#Arun Jaitley   #union budget   #interim budget   #central government   #parliment   #Narendra Modi   #India budget   #Budget 2019  
File photo (Arun Kumar)
File photo (Arun Kumar)

Narendra Modi-led NDA government is due to present its last budget on February 1, before the 2019 general elections. Finance minister Arun Jaitley, who is currently in US for medical treatment, is likely to present the budget. This will be an interim budget of the NDA government.

Also read: Breaking down some key terms used in budget

But what exactly is an interim budget?
  • An interim budget is presented when the incumbent government is going through an election in the near future. In such a case, propriety demands that the task of framing the full budget be left to the incoming government
  • Through the interim budget, parliament passes a vote-on-account that allows the government to meet the expenses of the administration until the new parliament considers and passes the budget for the whole year.
Interim budget
 
1.       It is only for a period of two to four months until the new government is formed after elections.
2.       It does not contain tax reforms and introduction of new policies and schemes i.e., no financial bill.
3.       The government would still present the complete set of accounts including for both expenditures and receipts.
4.       No heavy discussions are carried out in the parliament during the interim budget.
 
Union budget
 
1.       It is for 12 months i.e., a full financial year.
2.       A full budget includes major policy/legal decisions that would affect the finances/expenditures of the government.
3.       The union budget, which comes with a Finance Act, contains several amendments to various legislations.
4.       The Lok Sabha and Rajya Sabha pass the budget only after discussion and voting on demand for grants.
 
  • The constitution provides for a vote on account, and that says that government can approach parliament to sanction expenditures for a part of the year.
  • The previous 12 interim budgets, since independence, have refrained from altering the financial bill.
  • Interim budget is considered to be crucial for the incumbent government as it is their last chance to attract the voters and make a fervent appeal to the electorate.  

 

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