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Finance Minister Nirmala Sitharaman will present the Union Budget on July 23, having already presented an Interim Budget ahead of the Lok Sabha elections. In light of the upcoming Budget, we take a look at some of the terms associated with the exercise.
In election years, a full financial year Budget is presented by the government which comes to power after the Lok Sabha elections. Prior to that, an Interim Budget is presented, with a vote on account for expenditures.
So that brings us to the basic question—what is a vote on account?
Vote on account explained
A vote on account, as defined by Article 116 of the Indian Constitution, is a grant in advance for the central government to meet short-term expenditure needs from the Consolidated Fund of India, generally lasting for a few months till the new financial year kicks in.
Article 266 of the Indian Constitution defines the Consolidated Fund of India, which is where all the revenue of the central government, be it from taxes, funds raised by loans and interest on loans, and a portion of taxes from states, is parked.
It states that no money from the Consolidated Fund may be withdrawn except under an appropriation undertaken by law, for which the Centre passes an appropriation bill during the Union Budget.
However, appropriation bills tend to require time to pass in the Parliament and become law, and to alleviate any problems rising from such as situation as the Centre requires permission to withdraw any sum of money from the CFI from the beginning of a new financial year, a vote on account is passed.
Typically, a vote on account is treated as a formality and passed with no discussion on the matter. It is also used during the final year of the elected government to pass a short-term expense bill to keep things running till the new government can ratify a full Budget. It is usually laid out for two months and foregoes allocation of funds for major projects, being allocated for salaries, interest on loans, subsidies and so forth instead.
Union Budget 2024 | Making a record for any Finance Minister, Nirmala Sitharaman will be presenting her 7th Union Budget on July 23, 2024 under the Modi 3.0 government. While inflation has burnt a hole in the pockets of 'aam janata', will this Budget spell relief for Indians? Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.