Explore the differences between Interim and Union Budgets, understanding their impact on India’s economy and future direction.
What is Interim Budget
An interim budget, also known as a vote-on-account or a provisional budget, is a financial statement presented by the government when it is unable to present a full-fledged budget due to various reasons such as upcoming elections or other political factors.
What is Union Budget
The Union Budget is an annual financial plan presented by the Government of India, detailing its revenue sources and expenditure allocations for the upcoming fiscal year, typically presented in February by the Finance Minister in Parliament.
Difference Between Interim Budget & Union Budget
| INTERIM BUDGET | UNION BUDGET |
| The central government presents an interim budget prior to the general elections. | The Central Government submits the Union Budget annually to Parliament, covering the entirety of the fiscal year. |
| The vote-on-account is approved in the Lok Sabha without any discussion | Union Budget is passed after complete discussions in Lok Sabha |
| The Interim Budget includes the income and expenses from the previous year, also mentions the expenses for a few months till the charge is taken over by the next Government. | The Union Budget consists of two main sections. One part covers the finances of the previous year, including expenses and income. The other part outlines the government’s strategy to generate funds through various measures and how these funds will be used for national development. |
| The Interim Budget is for a duration of approximately 2 to 4 months of the fiscal year. | The Union Budget is for the entire fiscal year. |
| Income generated from tax collection will not be incorporated into the Interim Budget. | The Union Budget will incorporate a segment detailing expenditure on various social welfare initiatives aimed at fostering the country’s development, alongside strategies for revenue generation through taxation. |
Summary.
The term “interim” refers to something temporary or serving as a short-term solution. When a new government is about to take office, an interim budget is presented. However, the incumbent government requires Parliament’s approval to access funds from the Consolidated Fund of India, which contains all national revenue. Hence, an interim budget plays a crucial role in parliamentary budgetary processes.
Also, check our Article on the Best ways to save Income Tax.
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