What is the difference between 'vote-on-account' and 'interim budget'?The provision of a 'vote-on-ac

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UPSC Prelims is a competitive examination conducted in India. This question is from the 2011 UPSC Prelims Indian Polity & Governance paper.

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This UPSC Prelims 2011 Indian Polity & Governance question has a medium difficulty level and is marked as an important question.

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Question

What is the difference between 'vote-on-account' and 'interim budget'?The provision of a 'vote-on-account' is used by a regular Government, while an 'interim budget' is a provision used by a caretaker Government.A 'vote-on-account' only deals with the expenditure in Government's budget, while an 'interim budget' includes both expenditure and receipts.Which of the statements given above is/are correct?

Accepted Answer

Correct Answer: C — Both 1 and 2Step-by-step Solution:This is a nuanced question distinguishing between two closely related budgetary instruments.Statement 1 — Vote-on-account by regular Government; Interim Budget by caretaker Government: This is correct. A Vote-on-Account is sought when a regular, incumbent government cannot present the full budget in time (e.g., due to election schedule, delay in parliamentary session) — it is an advance authorisation from Parliament to withdraw funds for a limited period (usually 2 months) to keep the government functioning until the full budget is passed. An Interim Budget is typically presented by a caretaker government (a government that is completing its term and about to face elections) — it covers the full fiscal year's estimates including both receipts and expenditure, acknowledging that the incoming government (post-election) may change the policies. Convention holds that an outgoing government should not make major tax or policy changes in an interim budget. ✓Statement 2 — Vote-on-account only deals with expenditure; Interim budget includes both expenditure and receipts: This is correct. A Vote-on-Account is specifically passed under Article 116 of the Constitution — it provides grants in advance for expenditure only (withdrawal from Consolidated Fund) — it does NOT change tax laws or receipts. An Interim Budget, on the other hand, is a full budget presented for a shorter period or covering the full year — it includes both the Revenue Budget (receipts from taxes and other sources) and the Capital Budget, as well as tax proposals (though by convention, major tax changes are avoided). ✓Key Concept: Recent example: February 2024 — BJP government (PM Modi) presented an Interim Budget for 2024–25 (full year) before the Lok Sabha elections (April–May 2024); the new government (also BJP under Modi — won third term) then presented the full Budget in July 2024. February 2019 — Interim Budget presented by Piyush Goyal (when Finance Minister Arun Jaitley was ill abroad); included PM-KISAN scheme announcement — breaking the convention of not introducing new schemes in interim budgets; Article 116 — Vote-on-Account: Limited advance grant for expenditure; Article 117 — Finance Bills: For taxation changes (requires Money Bill procedure). Zero-based Budgeting, Performance Budget, Gender Budget — modern budgetary reforms in India.

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More Questions from National Income – GDP, GNP, NNP & Measurement

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More Questions from National Income – GDP, GNP, NNP & Measurement

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