Interim Budget

Feb 1, 2024

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Context (IE): An Interim budget is presented by the Finance Minister.
An Interim Budget is a temporary financial plan covering government expenses until a new government takes over at the central level.
It seeks parliamentary approval for 4 months’ expenses, including salaries and ongoing programs, without tax changes.
It is presented when there is insufficient time for Parliament to approve various grants and debate changes in taxation before the fiscal year begins.
It’s widespread in election years, allowing the new government to present a full budget.

A Vote-on-account, a part of the Interim Budget, usually lasts for two months and outlines provisional government expenses (1/6^th of the total estimation) until a new government is formed.
The Vote on account can be approved within the framework of Interim budget.
R K Shanmugam Chetty presented Independent India’s first vote on account in 1948.

Difference between Interim and Union Budget

Parameter	Interim Budget	Union Budget
Presented when	The government’s term is ending, or there is a transition in power	Annually, at the beginning of the financial year
Presented by	The outgoing government	The ruling government of the day
Focuses on	Essential expenses	New policy initiatives, announcements, and changes in taxation and expenditure
Covers	limited to the expenditure required to run the government until the new government presents a full budget	All expenditures planned for the entire fiscal year, including developmental projects and ongoing schemes
Parliamentary approval	Usually, it gets for a few months or until the full budget is presented.	Requires for the entire fiscal year
Based on	Estimates for the upcoming financial year	Covers the entire financial year, starting from April 1 to March 31
Meant for	The smooth functioning of the government until a new government presents a full budget.	Outlining the reigning government’s financial plans for the entire fiscal year.