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Interim Budget 2024 – 2025

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The interim Budget, a ‘stop-gap’ arrangement, will be presented by Union Finance Minister of India on February 1 2024 as a full Budget will be presented in June-July.

  • Definition – It is a shorter-term financial statement that allows for the smooth functioning of the government until a new administration can present a full budget for the entire fiscal year.

Budget or Annual financial statement is a statement of the estimated receipts and expenditure of the Government of India for a specific financial year according to Article 112 of the Indian Constitution.

  • Need – In an election year, the incumbent Government cannot present a full Budget as there may be a change in the executive.
  • Legality – There is no constitutional provision, so the Centre can seek the Lower House’s approval for the funds for the transition period via the vote on account provision.

Vote on Account
  • Article 116 – It allows the Lower House to make any grant in advance for the estimated expenditure for part of any financial year by voting and passing such a legislation.
  • Lok Sabha is empowered to authorise withdrawal of required funds from the Consolidated Fund of India for such expenditure.
  • Coverage – Centre’s fund requirements for salaries, ongoing projects and other expenditure for the transitional period.
  • Limitation – It cannot make any changes to tax rates.
  • Validity – Only for 2 months, can be extended up to 4 months.
  • Convention – It has been the trend for outgoing governments to present an interim budget instead of a vote on account.
  • Features – It will present the current state of the Indian economy, its fiscal status including India’s revised estimated growth in the next year and also detail the government’s planned and non-planned expenditure and receipts.
  • The government is allowed to revise tax rates.
Similarities of Interim Budget with Full Budget
  • It is presented by Union Finance Minister to both house of the Parliament and will be put to vote and then sent for Presidential approval.
  • It is also debated in the Lok Sabha before passage and is valid for the entire year though it is merely a transition arrangement.
Differences between Interim Budget and Full Budget
  • It would just be to meet with the expenditure till a new government enact a full Budget.
  • No spectacular announcements are made unlike full Budget.
  • In 2024 – India is likely go to polls in April-May, thus Interim Budget will be presented for the 1st 4 months of this fiscal year.

If the Budget is not passed by the Lok Sabha, the Prime Minister and his Cabinet will have to resign.