Budget 2024: Finance Minister will present the interim budget on February 1, know how this full budget is different

India’s next budget is going to come in a few days. Union Finance Minister Nirmala Sitharaman will present her sixth budget on February 1. However, it will be an interim budget rather than a full budget as Lok Sabha elections are to be held in a few months. An interim budget is a short-term financial plan that covers government spending until a new government takes office after an election. The regular budget process may be disrupted due to change of power during election years. To guarantee that government operations and key services continue to run smoothly until the formation of the next government, the outgoing government prepares an interim budget.

The current government’s ability to spend money is limited to the validity of the Union Budget till March 31. The current government needs approval from Parliament to cover the fee for any expenditure incurred between April 1 and the installation of the new government. Vote on Account, as defined by Article 116 of the Constitution, represents an advance payment to the Government from the “Consolidated Fund of India”, set aside specifically to meet immediate expenditure requirements. All money collected by the central government – ​​taxes, loan interest and other revenues – is kept in the Consolidated Fund of India.

The last interim budget was presented in 2019 by Piyush Goyal, who was holding additional charge of the Finance Ministry after Arun Jaitley fell ill. After the BJP government secured a second consecutive term, Sitharaman was appointed as the Finance Minister and presented the full budget on 5 July 2019. On February 1, she will present the interim budget for 2024-25 in Parliament, which will come into effect from April 1, 2024. Under the interim budget, funds are generally allocated for ongoing programmes, immediate needs and essential government activities. No new policies or programs are introduced that have a major financial impact.

Difference between interim and union budget

The interim budget will outline the estimated revenues and expenses of the government until the new government is formed. A comprehensive budget, on the other hand, covers every aspect of government finances, including revenues, expenditures, allocations and policy details. The Union Budget, which highlights the government’s commitment towards several initiatives and changes, often influences investors’ mood. It has the power to influence market expectations and economic activity. A full-year budget, which reflects the economic course of the country for the entire financial year, is a strategic tool, while the interim budget provides financial information for a temporary period.