In a year with Lok Sabha elections, the national government issues an interim budget rather than the usual Union Budget. And the upcoming Budget, which will be presented by Finance Minister Nirmala Sitharaman on February 1, 2024, would be an interim Budget, with general elections scheduled for March to May 2024. An outgoing government submits merely an interim Budget or requests a vote on account, leaving the complete Budget to the new government.
According to the Constitution, the government may not remove funds from the Consolidated Fund of India unless authorized by legislation. And, for this purpose, an appropriation bill is passed during the Budget process, which may take some time to pass through Parliament and become law. Meanwhile, the government would need approval to spend money beginning April 1, when the new fiscal year begins. Vote on Account is the approval sought by the government to take funds from the Consolidated Fund of India during a two-month period. Vote on account is essentially the parliament's interim authorization to the government to spend money, as opposed to the full Budget, which is a detailed financial summary of expenditures and receipts that includes changes in taxes and government policies.
A vote on account, as described by Article 116 of the Indian Constitution, is an advance grant from the Consolidated Fund of India to the government to satisfy short-term expenditure obligations until the new fiscal year begins. The Consolidated Fund of India, as specified in Article 266 of the Constitution, holds all central government revenue, including taxes, interest on loans, and a share of state taxes. It may not be withdrawn unless authorized by law and approved by the Centre each year at the Union Budget.
The estimated expenditure that covers the expenses required before a new administration enters office is known as the Vote on Account. It, like the fiscal document presented in a regular budget year, must be approved by a majority of Parliament. A vote on account is only an authorization to spend money in the interim, as opposed to a comprehensive Budget that includes details of expenditures and receipts, as well as tax changes and government policies.
While the phrases interim budget and vote on account are frequently used interchangeably, there are significant differences between the two. One significant distinction is that the Vote on Account cannot affect the tax regime, although the interim Budget can. Furthermore, an interim Budget includes both expenditures and receipts, but a vote on account only includes expenditures borne by the government.
An interim budget must be debated and then voted in the Lok Sabha, but a vote on account deals only with expenditure and is passed by the Lok Sabha without debate. An interim budget is comparable to a full budget in that it contains forecasts for only a few months, but the vote on account can be passed through the interim budget. A vote on account is normally valid for two months, whereas an interim budget is valid for a complete year.
