Nirmala Sitharaman will be presenting her sixth budget as the Finance Minister.
Union Finance Minister Nirmala Sitharaman will not be presenting the full budget in the Parliament on February 1. Instead, she will table a vote on account or interim budget in the House. Since, it's an election year, with the model code of conduct expected to come into effect in March, the government will table an interim budget with expenses and revenues for the period until a new government takes charge. This allows the government to meet its expenses until the new government takes charge. A full budget is likely to be presented in July after the newly elected government takes charge,
Interim budgets have certain limitations imposed by the Election Commission of India to ensure no undue influence on the voters. The government is not allowed to propose major taxes or policy reforms in the budget as it can influence voters in favour of the ruling dispensation.
Ms Sitharaman, who will be presenting her sixth budget as the Finance Minister this year, has already made clear that the budget is unlikely to have any “spectacular announcement” as it would be a vote on account in the run-up to the general elections.
Speaking at the CII Global Economic Policy Forum in December 2023, Ms Sitharaman said, "It is a matter of truth that the February 1, 2024 budget that will be announced will just be a vote on account because we will be in an election mode. So the budget that the government presents will just be to meet the expenditure of the government till a new government comes into play."
As defined by Article 116 of the Constitution, a vote on account is an advance grant to the government from the Consolidated Fund Of India to meet their short-term expenditures. All the revenue generated by the central government through taxes, interest on loans and other such collections is collected under the Consolidated Fund Of India. To make any withdrawal from this corpus fund, an appropriation undertaken by law and approved by the Central government each year during the Union Budget is needed.
With the new financial year kicking in, the government will need approval to spend money from the Consolidated Fund Of India. Since passing the bills may take time, a vote on account is the Parliament's interim approval of the government's spending for this tenure.
Vote on account usually presents a report card of the incumbent government's performance and achievement in the previous fiscal year. While it features expenses likely to be made in the next few months, the interim budget does not make proposals on the income part of the budget through the collection of taxes.