Decoding Budget 2024: Understanding the key differences between Interim and Regular budgets

Union Finance Minister Nirmala Sitharaman is gearing up to present an interim budget on February 1, 2024. This marks her sixth budget presentation, emphasizing a departure from the usual full budget due to the impending elections.

The customary practice during an election year involves the incumbent government presenting an interim budget, which serves as a provisional financial plan to cover essential expenditures until a new government assumes office. The presentation of the interim budget is expected to take place in a joint session of Parliament, with a subsequent full budget unveiling once the new government is established post-elections.

One of the distinctive features of an interim budget is the passage of a vote-on-account by Parliament. This mechanism addresses crucial expenses such as central government staff salaries and the funding of ongoing government projects. Typically valid for two months, the vote-on-account can be extended if deemed necessary.

Key disparities exist between an interim budget and a full budget. The interim budget functions as a temporary financial plan, catering to government expenditures during the transitional period until the new government takes charge. On the other hand, a full budget is a comprehensive financial blueprint encompassing all aspects of government earnings, expenditures, allocations, and policy announcements. While a full budget outlines the nation's economic course for an entire fiscal year, the interim budget provides financial details for the transitional period.

Finance Minister Sitharaman has indicated that the interim budget on February 1 will not feature major announcements. Instead, it will primarily consist of a vote-on-account to address the government's expenses until a new government is in place. Sitharaman drew parallels with the British tradition of a vote-on-account during an election year and suggested that significant announcements may be deferred until after the new government assumes office.