The Narendra Modi-led-BJP government will present its last budget on 1st February, months before the upcoming Lok Sabha elections, which is scheduled to be held in April-May 2019.
The Union Finance Ministry has issued a clarification that the budget will be called as ‘interim budget’ amid news reports and speculations that the government can present a full budget. Union minister Piyush Goyal, who has been temporarily given the charge of the finance ministry, will present the interim budget 2019.
In this article, we will discuss – the interim budget as well as the full budget or regular budget.
What is an interim budget?
An interim budget is the budget of a regime or administration that is going through a period of transition. It is very much similar to a full budget as the government presents expenses for the current fiscal and makes projections for the upcoming fiscal year through it. An interim budget is also a detailed set of accounts that includes expenditure and receipts and also the complete financial statement.
When is an interim budget presented?
The government presents an interim budget if it does not have time to present a full Budget or if the general elections may be in the near future. So usually, in an election year, the outgoing government presents an interim budget and the task of framing the full budget is left for the next government.
Why do we need an interim budget?
The government needs Interim Budget to work during the time it takes for a new government to make its own fiscal plan. The budget for the year permitted by Parliament gives the government spending rights only till 31st March i.e. end of the financial year.
If for any reason the government is unable to present a full budget before the fiscal year ends, it will require parliamentary authority for incurring expenses in the new financial year until a full Budget is presented. The Parliament, via interim Budget, passes a vote-on-account that permits the government to meet the expenses of the government until the new Parliament passes the Budget for the whole year. In case of election, the vote-on-account is usually for a 4-month period.
What is the difference between interim and regular budget?
In an interim budget, the vote-on-account asks for Parliament’s approval for incurring expenditure for part of a financial year. The estimates are presented for the whole year, as is the case with the regular Budget. The new administration has the full right to change the estimates fully when the final Budget is presented.
Can the government declare new taxes and policies?
The government can make changes in tax in the interim budget under the Constitution. The 12 interim budgets since India’s Independence have refrained from declaring big-ticket changes or new schemes.
At the same time, numerous governments, including the Congress-led UPA in 2009, have not shied away from making policy statements in interim budgets.
