Within a few months country will participate in the 2019 election process, which means that the ruling government may phase out and a new government or the same government with new alliances may assume the parliament. Hence this year instead of a full budget, an interim budget will be passed in the assembly.
Let us find out more about an interim budget and its implications.
What is an Interim Budget and why is it needed?
During the election year, taking charge on the preparation of full budget or debating on it and passing it is not practical by the ruling Government or the new Government before the new financial year begins. Thus, the interim budget is announced or vote on account, which will be followed as a full budget for few months by the new Government post elections.
Vote on account is the special provision vote passed by the Parliament, to provide funding for the administration expenses to be incurred for the short duration until the full budget is passed.
What is an Annual Budget?
Annual Budget comprises of two parts – Summary of income and expenses made by the previous Government and announcement of the proposed ways to raise money from the taxes and spending them on the welfare measures in various segments for the development across the country.
Once the annual budget speech is presented by the Finance Minister, it further gets through the elaborated debates in the Parliament – to obtain vote for the proposal to get it passed or vote against it.
What is the difference between the regular budget and an interim budget?
In an Interim Budget, by means of Vote on account, the permission is granted to the previous government to incur expenditure for the short duration of the fiscal year before the regular budget is passed. The estimates presented are for the entire year, so as in case of the regular budget. The new government has full freedom to make any amount of changes before the final budget is presented.