FAQs: Difference between full budget and Vote-on-Account

This year, a vote-on-account would be presented instead of a full budget because general elections will be conducted in May. 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.

What is 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.

Also Read: Vote-On-Account countdown begins: What next govt will inherit?

How vote-on-account is different from Budget?

> A vote-on-account is different from an interim Budget as the former is a statement of only expendiatures while the latter is a complete set of accounts, including both expenditure and receipts. However, a vote-on-account is practised every budget. Unlike a full Budget, the vote-on-account does not tweak the prevailing tax rates. Also, it cannot announce any new schemes.

 Why vote-on-account and not a full Budget?

> 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.

Who approves it?

> In an election year, the Budgets may be presented twice—first to secure a vote-on-account for a few months and later in full. As a convention, a vote-on-account is treated as a formal matter and passed by Lok Sabha without discussion. It is passed by Lok Sabha after the general discussion on the Budget (General and Railway) is over and before the discussion on demands for grants is taken up.

For how long is vote-on-account valid?

> The vote-on-account is normally valid for for two months and is in operation till the full Budget is passed. But during an election year, it may be extended for a period more than two months if it is anticipated that the main demands and the Appropriation Bill will take longer than two months to be passed by the House.

The Parliament will extend its winter session that would open between February 5 and 21. The session is likely to take up key pending legislations such as the Andhra Pradesh bifurcation bill. Finance Minister P Chidambaram will hold the vote-on-account on February 17.