Budget 2024: Understanding the Interim Budget

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Budget 2024: Understanding the Interim Budget
  • By Divya Singhal
  • 18th January, 2024
  • Banking

On February 1, 2024, Union Finance Minister Nirmala Sitharaman will present the interim budget for 2024-25. This interim budget differs from the regular one due to its transitional nature.

Transitioning from 2023 to 2024: What to Expect

In December, Sitharaman clarified that the upcoming budget would serve as a “vote on account” before general elections. No major announcements are expected during this period.

Interim vs Full-Fledged Budget: A Distinctive Overview

The interim budget outlines expected receipts and expenditures until a new government forms, unlike the comprehensive full-year budget that covers all aspects of government finances.

Election Dynamics and Budgeting

With Lok Sabha elections in April-May 2024, Sitharaman will present the interim budget on February 1, effective from April 1, 2024. Major policy announcements are traditionally avoided during this period.

Vote-on-Account: A Temporary Authorization

The interim budget, also known as a ‘vote-on-account,’ authorizes specific expenditures until a new government assumes office, adhering to Election Commission limitations to prevent undue voter influence.

Nirmala Sitharaman’s Perspective

Nirmala Sitharaman emphasized that the February 1, 2024, budget would be a vote on account, serving the government’s expenditure needs until a new government takes charge.

Pre-Budget Traditions and Limitations

Before the vote-on-account, customary pre-budget ‘Economic Surveys’ are abstained from, a tradition usually observed a day before the full budget presentation in July.

Duration and Constitutional Basis

A vote-on-account typically remains effective for two months, with possible extensions if necessary. As per Article 116 of the Constitution, it signifies an upfront allocation for immediate expenditure needs from the ‘Consolidated Fund of India.’

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