Union Finance Minister Nirmala Sitharaman presented a pre-election Budget, which technically is a ‘vote on account’ and popularly termed an Interim Budget.

It seeks Parliament’s nod for a grant in advance to meet the central government’s essential expenditure for the first four months of the new fiscal year that starts in April.

A new government elected after the April/May General Elections will present the full Budget, likely in July.

What is ‘vote on account’?

• Article 116 of the Constitution deals with vote on account.

• Usually, in an election year, the central government does not present a full Union Budget. Instead it presents a vote on account. 

• Traditionally, a vote on account is an authorisation for incurring certain expenditures required till a new government takes office.

• Governments in the past have refrained from making any major policy announcement during the vote on account.

• The full Budget is presented after the elections by the newly formed central government. 

• The government needs money to fund its expenses for a short period of time or until a full Budget is passed.

• Vote on account is a grant in advance by Parliament, in respect of the estimated expenditure for a part of new financial year, pending the completion of procedure relating to the voting on the demand for grants and the passing of the Appropriation Bill.

• It presents an estimate of expenditures to be sanctioned till the full Budget is passed.

• An Appropriation Bill is passed annually (or at various times of the year) providing for the withdrawal or appropriation from and out of the Consolidated Fund of India of moneys by Lok Sabha and moneys charged on the Consolidated Fund for the services of a financial year or a part thereof.

• An Appropriation Bill is introduced in pursuance of Article 114(1) of the Constitution of India to provide for the appropriation out of the Consolidated Fund of India.

• The vote on account gives approval to the Centre for withdrawal of money from the Consolidated Fund of India for a specified expenditure.

• The vote on account is passed by the Lok Sabha without discussion.

• Before the vote on account, the governments also do not present the customary pre-budget Economic Survey that traditionally is presented a day before the presentation of the full Budget. The survey which details the state of the economy and directional events, is presented when the full Budget is tabled in Parliament.

Interim Budgets

• The first Interim Budget of independent India was presented by the then Finance Minister R.K. Shanmukham Chetty on November 26, 1947. 

• C.D. Deshmukh presented the Interim Budget in 1952 and T.T. Krishnamachari in 1957.

• Former Prime Minister Morarji Desai presented two Interim Budgets, one in 1962 and the other in 1967. Desai has the distinction of presenting six Budgets in a row. He had presented a total number of 10 Union Budgets.

• Y.B. Chavan presented Interim Budget in 1971, H.M. Patel in 1977, R. Venkataraman in 1980, Yashwant Sinha in 1991 and Manmohan Singh in 1996.

• Some finance ministers in the past have used the occasion to announce doles for rural India and the middle class.

• For instance, the then Finance Minister Piyush Goyal in his interim Budget in 2019 had announced Rs 75,000 crore outlay for PM KISAN Samman Nidhi scheme. He also raised standard deduction to Rs 50,000, and came up with tax rebate to ensure that individuals with income of up to Rs 7 lakh per annum are not taxed.

• In the pre-election Budget of 2014, Finance Minister P. Chidambaram in the Congress-led UPA government slashed excise duty on cars, SUVs, two wheelers, capital goods and consumer durables to boost manufacturing.

• Pranab Mukherjee too in his Interim Budget in 2009 hiked the outlay for rural sector schemes to shield the economy from the aftermath of global financial crisis.

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