Finance Minister Nirmala Sitharaman on Thursday presented the Narendra Modi government’s last budget before the upcoming Lok Sabha elections. Notably, when the national elections happen, the government does not present a full budget. Instead, it presents an interim budget. Additionally, the government requests a vote on account, which means that it is leaving the full budget for the next elected government.
What is a vote on account?
Article 116 of the Indian Constitution outlines the concept of a vote on account, signifying an advanced allocation from the Consolidated Fund of India to meet short-term expenditure needs until the commencement ofthe new fiscal year.
This Consolidated Fund, as defined in Article 266, serves as the repository for central government revenue, encompassing taxes, loan interest, and a share of state taxes. To access funds from this fund, an annual appropriation, sanctioned by law and approved during the Union Budget, is imperative.
The necessity for a vote on account arises during transitions between governments. Whether through the presentation of an interim budget or the pursuit of a vote on account, the outgoing government ensures that the upcoming government assumes responsibility for delivering the complete budget. Importantly, a vote on account has no bearing on the existing tax framework.
Constitutionally, government withdrawal from the Consolidated Fund demands prior authorisation through an appropriation bill passed during the Budget process. However, this legislative procedure can be time-consuming. As the new fiscal year commences on April 1, governmental expenditure necessitates approval, even if only for a single penny.
The vote on account process involves withdrawing funds from the Consolidated Fund, typically covering a two-month period. It is a procedural formality, exempt from debates. In instances where elections coincide with the initial months of a fiscal year, the government seeks a four-month vote on account. Essentially, it represents interim parliamentary consent for government spending.
Unlike a comprehensive Budget encompassing detailed expenditures, receipts, tax alterations, and policy outlines, a vote on account serves as a provisional green light for spending. During election years, the government, facing elections shortly into the fiscal year, prefers a vote on account over a full budget to avoid hindering the design of post-election budgets.
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Budget 2024: What is a vote on account? Know how is it different from Interim Budget
