What is the difference between Interim Budget and Vote on Account?

The Union Finance Minister Nirmala Sitharaman will be presenting the Union Budget 2023 in Parliament on February 1, 2023. Find out the difference between Interim Budget and Vote on Account and other details here.
Difference between Interim Budget and Vote on Account
Difference between Interim Budget and Vote on Account

The Union Finance Minister Nirmala Sitharaman will be presenting the Union Budget 2023 in Parliament on February 1, 2023. 

This is also Nirmala Sitharaman's 6th budget presentation as the Finance minister. The 2023-24 budget session is the last full-fledged Union Budget to be presented by the Modi Government. The Lok Sabha Elections will be held in early 2024 and the interim budget will be presented next year. 

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It is common to be confused between interim budget and vote on account as they represent the same things sometimes but as the new Budget approaches us On February 1, 2023, it's all the more crucial to find out what each exactly means and what is the difference between them.

Though there are some fundamental differences between Vote on Account and Interim Budget some may find them similar as both are crucial parts of our constitution and provide an essential function of ensuring that the government has adequate funding to perform its regular activities. They are majorly used to take into account the expenditure by the ruling government. 

Most revenue of India is retained through the consolidated fund of India and this grant generally lasts for 2 months until the new financial year begins. It is observed that the interim budget is usually set into motion during an election year or a transition period.

The major Difference Between a Vote on Account and Interim Budget is that vote on the account can not impact the tax regime, whereas the Interim budget can impact or change it. 

People may use these terms interchangeably but let's find out in detail how are they significantly different in detail.

READ|Important Glossary Related to Union Budget

What is the Interim Budget?

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An Interim Budget is presented by the Government in the Parliament in case it has no time to present the complete budget. This generally happens when the elections are approaching and the Budget is to be presented before the voting is done. It is only justified if the ruling Government presents the Budget. 

This way the Government in action would have the rights until the end of the financial year and not the outgoing government. 

When the new government frames a new budget, it can either change or follow the estimates set in the interim budget as it deems fit.

It is however presented for the whole year just like a regular budget. In the Interim Budget, the Election Commission binds the Government with various policies that may not lead to influencing the general public before the voting begins. 

What is Vote on Account?

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It is passed through the interim budget and allows the Government to meet small expenditures before elections occur. It is passed as a convention and no discussion as such takes place in it. It is like a grant in advance that the government needs to function till the time vote on a demand for grants and passing of the Finance Bill and Appropriation Bill occurs. 

Difference Between Interim Budget and Vote on Account

Interim Budget

Vote on Account

During the time of approaching elections, it is not practical to present a full budget, therefore the government presents an interim budget.

Vote-on-Account is a provision by which the government seeks Parliament’s approval for funds that are sufficient to bear the expenditure till the formation of a new government takes place

Interim Budget consists of both expenditure and receipts

A vote-on-account lists only the expenditure beared by the government

It has to be discussed in the Lok Sabha and then passed.

A Vote-On-Account is treated as a formal matter so it can be passed by the Lok Sabha without discussion

The Government of India has the power to make changes in the tax regime in the interim budget also.

Vote on Account cannot change the Direct Taxes at any cost. Any alteration in direct taxes can only be brought about by passing of the Finance Bill.

It is like a budget for the transition period ( when there are a few months of the Government remaining in power)

The vote-on-account can be passed through the interim budget.

An interim budget is valid for an entire year.

A vote on account is usually valid for 2 months.

 

READ|Nirmala Sitharaman Biography: Birth, Age, Family, Education, Political Career, Recognitions, and More About Finance Minister of India

Bottom line

The key Difference Between the Vote on Account and Interim Budget is that

  • Vote on Account contains just the government's expenses, whereas the interim Budget deals with receipts and payments.
  • The vote-on-account is valid for two months, while Interim Budget is a budget for the change period when elections are approaching.

Also Read| What is the difference between Money Bill and Finance Bill?

What is the difference between Lok Sabha and Rajya Sabha?

FAQ

What is a vote on account budget?

Vote on Account is the special provision given to the government to obtain the vote of Parliament to withdraw money when the budget for the new financial year is not released

What is vote on account in Lok Sabha?

A vote on account is the process by which an incumbent government obtains votes from Parliament to draw money from the Consolidated Fund of India

What does interim mean?

The term 'interim' means temporary or for the time being.
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