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What is vote on account?
It’s important for you to know what vote-on-account is, especially in 2024.

vote on account

The country is approaching the election year in 2024, and voting is usually held in April-May. However, the Union Government has to present a budget for the entire upcoming year in February of the same year. In election years, hence, the government doesn’t do a whole year’s budget – instead, it prepares a shorter interim budget.

That’s where a vote-on-account comes into play.

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Explaining the vote on account

It is standard practice for the incumbent government to not present a full year’s budget in the election year. Instead, the Finance Ministry prepares an Interim Budget for the rest of its tenure, and leaves the task of framing the whole thing to the incoming government. The parliament has to vote on the budget, which means that it gives permission to the current government to meet its expenses until a new government is formed.

It is common for the media to use the terms Interim Budget and Vote on Account interchangeably. Even though they’re related, they do mean two different things.

Differences between Interim Budget and Vote-on-Account

Interim BudgetVote-on-Account
When elections are approaching, it is impractical to present a full budget for the upcoming year. This is why an interim budget is reported.The vote-on-account is passed through the interim budget. This is a special permission obtained by the current government to spend funds for the remaining year before the next government is elected.
Interim budget deals with both the receipts of funds for the government and its expenditureA vote-on-account contains only the expenditure of the government
This is passed after discussion in the Lok SabhaThis is treated as a formal and procedural matter and is passed by the Lok Sabha without discussion
The Interim Budget can change the tax regime of the country.Vote-on-Account cannot make changes to tax regimes.

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What can / cannot be included in the interim budgets?

The interim budget generally includes estimates for expenditure, revenue, fiscal deficit, financial performance and projections for the upcoming financial year of the current government. This budget, however, cannot include any major policy announcements. This is according to the Election Commission’s code of conduct. It says that the incumbent cannot present an Economic Survey with the Budget in election years.

Conclusion

2024 is an election year for the Union Government. This year, the current government will present an Interim Budget for the year, and leave the task of creating the whole thing to the government that comes in next.

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Devansh Sinhal

I am passionate about stock investing and have a knack for simplifying complex market concepts. Providing readers with valuable insights and empowering them to make informed investment decisions is my jam.

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