Full Budget vs Interim Budget, what’s the difference?
Tue Feb 12 2019 / By: Nupur SharmaAnnual budget is submitted for the next financial year by the Government of India in February each year. You get all the tax saving options, including your Home Loan, Fixed Deposits and Credit Fund. If it is an election year, however, the government would present a' vote on accounts' (VOA) or an interim budget, just as it is in the 2019 elections year.
So, what is the budget of the VOA / interim? How does the whole budget differ? How long is the VOA time gap with its entire budget? We’ll tell you.
What’s an annual budget?
There are two parts of an annual budget: one is the summary of the government's previous year's revenues and expenses and the second are the suggested methods of raising tax money and spending them on welfare measures across the country in the individual segments.
When the Finance Minister makes the annual budget speech, he or she will hold detailed debates before a vote for or against the proposals is taken in Parliament. After that, it is said that the financial bill is passed. Usually this process runs until March 31st.
What’s an interim budget?
It is not practical for the new government to prepare or debate the whole budget after the elections and pass the bill before the new financial year begins. In February therefore, the ruling government would notify the new government in an interim budget or in a vote on its account and, in a few months after the elections, will follow suit with a full budget.
The interim budget will include the income and expenses reported by the new Government in the past year and the costs proposed in the coming months. The income portion of the budget is not suggested by tax collection. The VOA procedure would seek Parliament's approval. The funds for these are available once approval is obtained.
Also, the pre-election period, during which a code of conduct is established, contains an interim budget or VOA. A few months before. It would impose any major blows on central and state governments, since it might shift the voting pattern in favour of the governing government. Moreover, the governing government cannot present a full budget in the new government's perspective and approach.
Only the ruling government's revenue and expenses of the last year and also the parliamentary node of the costs proposed to be made during the next few months are covered by the VOA / interim budget. While, a full budget is an annual full budget, including last year's report card, income and spending through tax and welfare measures and wise businesses in the following financial year.
When the year of election comes, a vote is submitted by the ruling government and the full budget is submitted only after the new government has taken the oath. The time gap between them is usually no longer than six months.