Budget 2024: What is the Difference Between Interim Budget and Vote on Account

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Budget 2024: What is the Difference Between Interim Budget and Vote on Account

Every year the Finance Ministry release the budget document, but the year 2024 is an election year. India is gearing up for a high-stakes general election in 2024 which is expected between March and May. But the Finance Ministry releases a budget document pretty much every year. So, the central government will only be releasing an interim budget instead of the regular full-year fiscal statement.

Finance Minister Nirmala Sitharaman recently confirmed that the Feb 1 budget will solely be a VOTE on account. She said, “I’m not going to play a spoiled sport but it is a matter of truth that the first February 2024 budget that will be announced will just be a vote on an account.”

Now, what exactly does a finance minister mean, read the complete article to know the difference between an interim budget and a vote on account. 

Difference Between an Interim Budget and a Vote on Account?

• An interim budget is similar to a full budget but only has projections for the next few months. Whereas a vote on account can only be passed through the interim budget.
• An interim budget gives the government temporary permission to meet its expenses as well as revenue until the new government is formed. On the other hand, a vote on account is passed to meet that essential government expenditure like salaries or ongoing expenses before the elections are conducted
• An interim budget is valid for the expenditure occurring between March 1st until the new government is formed. Whereas a vote on account is normally valid for 2 months but can of course be extended.
• An interim budget can change the tax regime while a vote on the account cannot impact the tax regime. This means that an interim budget cannot include any major policy announcement but receive a nod from the majority in the parliament.

What is Union Budget 2024?

The Union Budget outlined in Article 112 of the Indian Constitution, is a crucial financial document for India. It is also known as the annual financial statement, which is a projection of the government’s receipts and expenditures for a specific financial year. It covers the government's finances for the financial year, which spans from April 1 to March 31. The budget is divided into two parts: the Revenue Budget and the Capital Budget.

Revenue Budget

• Revenue receipts comprise the government’s revenue from taxes and other non-tax sources. 
• Revenue expenditure includes expenses related to the daily operations of the government and services provided to citizens.
• Revenue deficit occurs if revenue expenditure exceeds revenue receipts.

Capital Budget

• Capital receipts mainly consist of loans from the public, foreign governments and RBI. 
• Capita expenditure involves spending on the development of infrastructure like machinery, and equipment. Building and facilities for health and education.
• Fiscal deficit arises when the government’s total spending exceeds its total revenue.

Conclusion

To conclude, the present government will not present a full budget during an election year. However, the full budget will be presented by the government that comes to power. So, the present government does not prepare a full budget instead it prepares an interim budget. For the rest of its tenure and leaves the task of framing a full budget to the incoming ruling party that will go on to form the new government. Currently, 14 Interim budgets have been presented. The full budget will be presented in July after the formation of a new government.

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