A full-year Budget serves as a roadmap, directing the nation's economic course.
Union Finance Minister Nirmala Sitharaman will present her sixth Budget on February 1, 2024. Instead of a full Budget, the Finance Minister will present an Interim Budget as the Lok Sabha elections are due to take place in a few months.
The Finance Minister is expected to present the Interim Budget in a joint sitting of Parliament, while the full Budget will be presented after a new government takes over following the Lok Sabha elections due in April-May this year.
In an election year, it is a normal parliamentary practice that the incumbent government presents an Interim Budget for the rest of its tenure. As part of it, the Parliament passes a vote-on-account to meet the essential expenditures like salaries of the central government staff, and funding of ongoing government projects, among other expenditures.
A vote-on-account is usually valid for two months but can be extended if required.
Differences between an Interim Budget and a Full Budget
The Interim Budget is a temporary financial plan covering the government expenditures for the period until a new government takes over after the elections.
On the other hand, a full-fledged Budget is a comprehensive financial plan that contains all aspects of government earnings, expenditures, allocations and policy announcements.
A full-year Budget serves as a roadmap, directing the nation's economic course for a complete fiscal year, while the Interim Budget presents the financial details for the transitional period.
Last month, Nirmala Sitharaman hinted that there won't be any big announcements made in the Interim Budget on February 1. “I am not going to play a spoilsport but it is a matter of truth that the February 1 Budget will just be a vote on account. We are in an election mode and the election happens during the coming summer. So, the Budget that the government presents will just be able to, or will just be a Budget to meet the expenditure of the government till a new government comes into play,” Sitharaman said at the CII's Global Economic Policy Forum 2023 in New Delhi.
She added, "The Budget following the British tradition is called a vote on account so no spectacular announcements are made that time. You may have to wait till after the new government comes in".
However, the central government, while presenting the last Interim Budget in 2019, had announced tax sops for the lower and middle classes by raising the tax exemption limit from ₹2.5 lakh per annum to ₹5 lakh per annum.