Understanding Vote on Account...

Dear readers, here we are presenting an article on Interim Budget or Vote on account which was
presented by Honourable Finance Minister P. Chidambram in the Parliament recently.
On 17th February 2014 Finance Minister P Chidambaram presented UPA IIs Interim budget instead of a
full budget because general elections will be conducted in May this year.
Since the present government would not have enough time in hand to vote for a full budget before the
commencement of the new financial year, a vote-on-account would ensure that sufficient funds are at the
disposal of the government to allow it to run the administration of the country until a new government
takes over.
The Past two Interim Budgets were presented in parliament in:
2004-05
Government NDA
Presented by Jaswant Singh
2009-10
Government UPA
Presented by Pranab Mukherjee
Vote-on-account: Vote-on-account deals only with the expenditure side of the government's budget.
The government gives an estimate of funds it requires to meet the expenditure that it incurs during the
first three to four months of an election financial year until a new government is in place.
The present government will have to obtain the sanction of the Parliament for an amount sufficient to
incur expenditure on various items for a part of the year. This approval by the Parliament to withdraw
money from the Consolidated Fund of India is known as Vote-on-Account.
Points to be noted:
1. Vote-on-account deals only with the expenditure side of the government's budget but an interim Budget
is a complete set of accounts, including both expenditure and receipts.
2. The Budget is a statement of the financial position of an administration for a definite period of time
based on estimates of expenditures during the period and proposals for financing them. A full budget thus
spells out both the manner in which the money is to be spent and how it is to be raised.
3. In an election year (like the present one), the ruling government generally opts for a vote-on-account
instead of a full budget.
While technically, it is not mandatory for the government to present a vote-on-account, but it would be
inappropriate to impose policies that may or may not be acceptable to the incoming government taking
over in the same year.
4. Technically, it is not necessary for a government to present a vote-on-account in an election year. But a
full Budget just before the elections makes a mockery of the whole exercise.
5. Also, it is ideally the new government's choice to decide how it'll raise and spend money.
How long a vote-on-account can be in force?

Normally, the vote-on-account is taken for two months only.But during election year or when it is
anticipated that the main Demands and Appropriation Bill will take longer time than two months, the voteon-account may be for a period extending two months.
Typically this period does not exceed six months, as that is the maximum gap possible between two
sittings of the Parliament
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