Everyone will gear up to watch the Union Budget 2019 on TV on February 1st. However, there are some things you need to know. The Budget will be presented by Piyush Goyal, in the absence of Finance Minister Arun Jaitley. Citing medical reasons for his absence, Mr. Jaitley added that this budget would be an interim. Since it’s the election season, the ongoing government will only present an Interim budget and request a Vote on Account from the parliament to meet its expenditures.
What is an Interim Budget? Why is it presented?
The government may not have the time to present the full budget or may come close to the election season. It is then that the interim budget comes into picture. In the interim budget, the ongoing government presents a tentative budget, but leaves it to the next government to present the full and final budget.
What is the importance of an interim budget?
The parliament approves the budget of the year and gives the government special spending rights till the end of the financial year i.e 31st March. If the government for any reason cannot present new budget before the end of the financial year, it will need parliamentary approval to incur expenditure until a full budget is in place. A vote-on-account is passed by the parliament to enables the ongoing government to meet its expenses for the coming month. A vote-on-account is usually for a duration of four months.
What is the difference between a vote on account, interim budget and a full budget?
A vote-on-account shows only the expenditure side of the governments budget and gives it special spending rights to be its expenses. The interim budget is just like a regular budget drafted for the full year with both expenditure and receipts. However, the interim budget refrains from making any major tax changes or schemes. The next government can draft an entirely new budget after that.
