Budget 2024: Decoding the 'Vote on Account' in an election year
India's Finance Minister Nirmala Sitharaman holds up a folder with the Government of India’s logo
Indian Finance Minister Nirmala Sitharaman will present the Union Budget on February 1. This will be the last budget of the Modi government before the parliamentary elections, scheduled to be held in April-May this year.
Given its timing, this budget will also be different from the other budgets presented thus far under the Modi government. The February 1 budget will be a 'Vote on Account'.
According to India's Finance Ministry, Article 116 of the Indian Constitution "empowers Lok Sabha to make any grant in advance in respect of the estimated expenditure for a part of the financial year pending completion of procedure for the voting of the Demands."
Simply put: India's parliament allows the government to spend for a brief period of the next fiscal year, before the Full Budget is voted upon by the Lok Sabha - India's lower house.
The Consolidated Fund of India is the corpus of all the revenue that the government receives. The government of the day needs parliamentary approval to spend from this corpus.
Usually, the 'Vote on Account' remains in force for four months in the fiscal year. The next government presents the full budget in July, which remains in effect for the rest of the fiscal year. India's fiscal year runs from April 1 to March 31.
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The 'Vote on Account' is often dubbed an 'Interim Budget'. However, this is a misnomer. While an 'Interim Budget' has both revenue and expenditure, a 'Vote on Account' only has the latter.
Union governments generally do not present a full budget ahead of polls, leaving the responsibility to the next government. The 'Vote on Account' allows the next government to design its own economic policies.
Unlike in a full budget, the government does not announce tax proposals in a 'Vote on Account'. This was the type of budget presented in the three preceding election years -- 2009, 2014 and 2019.
Pranab Mukherjee presented the 'Vote on Account' budget in 2009, while P Chidambaram presented it in 2014. The last 'Vote on Account' budget was presented by Piyush Goyal, then-acting Finance Minister.
The 'Vote on Account' is also cleared by the lower house of the Indian parliament without any discussion. This is because this budget is essential tothe smooth functioning of the government amid the electoral process.
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