DMPQ- What is the difference between “vote on account” and “interim budget”?

What is the difference between “vote on account” and “interim budget”?

Ans:       The budget presented during the election year is an interim budget. It is a summary of expenses expected by the government in the next few months. The interim Budget helps span the transition time between the two governments, entrusting the responsibility of a full budget on the new government.

Through the interim budget, Parliament passes a vote-on-account that allows the government to meet the expenses of the administration until the new Parliament considers and passes the budget for the whole year.

The new incoming government will have the full authority to change the estimates when the final budget is presented.  Although constitutionally the government can make tax changes in the interim budget, in the 12 interim budgets presented since Independence, none of them have undergone major changes.

Vote-on-Account is a special provision by which the government obtains Parliament’s approval for funds sufficient to incur expenditure for a part of the year (till the formation of a new government) enabling it to incur expenses till a full budget is prepared.

Normally it takes three months and is equivalent to one-fourth of the estimated yearly expenditure.

Vote-On-Account represents the expenditure side of the government’s budget while general budget includes both income and expenditure in the form of Financial and Appropriation Bill.

One of the essential features of a Vote-on-Account is that it cannot alter the Direct Taxes since they need to be passed by the Financial Bill.

A Vote-On-Account is treated as a formal matter and passed by the Lok Sabha without discussion as opposed to General or Interim budget

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