The Centre is likely to present a vote-on-account with an interim budget. Understandard practice, a vote-on-account or approval for essential government spending for a limited period is taken in an election year and a full-fledged budget is presented by the new government. If the budget date falls few months ahead of polls, then an Interim Budget is presented.
The government needs money to fund its expenses for a short period of time or until a full Budget is passed. It has to seek approval from Parliament to withdraw any money from the Consolidated Fund of India under the Constitution’s Article 266 for such expenditure.
Vote-on-account is that special provision by which the government obtains Parliament’s nod for funds sufficient to incur expenditure for a part of the year, enabling it to incur expenses for a short period of time or until a full Budget is passed.
What’s the duration?
The vote-on-account is taken for two months for a sum equivalent to one-sixth of the estimated expenditure for the entire year under various demands for grants. But it can be for a slightly longer period of time three to four months as well.
The full Budget is usually passed only after long discussions in Parliament and approval from the legislature takes time.
Since Parliament is not able to vote the entire budget before the beginning of the new fiscal, it is important that the government has enough funds at its disposal to keep the country running. And, vote-on-account is used at such a time.
Difference between vote-on-account and full Budget
A vote-on-account presents an estimate of expenditures to be sanctioned by the exchequer till the regular Budget is passed. And the full Budget deals with both expenditure and revenue as the government announces new programmes and estimates the public expenditure for the fiscal year.
A vote-on-account cannot alter direct taxes since they need to be passed through a finance bill. Under the regular Budget, fresh taxes may be imposed and old ones may go.
The vote-on-account is normally valid for two months but a full budget is valid for a full fiscal year or 12 months.
As a convention, a vote-on-account is treated as a formal matter and passed by the Lok Sabha without discussion. But the full budget is passed only after discussions and voting on demand for grants.
However, one common feature is that both include the previous year’s financial performance of the government.