What is Interim Budget? Finance Minister Nirmala Sitharaman presented the country's interim budget on the 1st of February.
Lok Sabha elections are to be held in April-May and before that, the Finance Minister gave information about the income and expenditure of the government in the coming few months through this interim budget.
Apart from this, information about some important schemes can also be given in it.
Every year the government presents the budget, then why was this budget called interim budget?
This is an important question because every year the full budget of the government comes, which is for the entire financial year.
But in the year when Lok Sabha elections are to be held, only the interim budget comes for a few months.
Interim Budget VS Full Budget: Why interim budget come once in 5 years?
The government presents an interim budget in an election year. Only the new government that comes after the elections has the right to present the budget for the entire financial year.
In the interim budget, expenditure is allowed till the formation of the new government and then the budget is passed by it. In this budget, details of expenditure and income are given till the budget of the new government comes. This is a temporary provision till the arrival of the new full budget. For this reason, it is called an interim budget.
As the interim budget comes before the general election, at that time, the Parliament must approve the government's request to take money from the Consolidated Fund for a new fiscal year that extends beyond its current term. This approval will remain in effect until a new government assumes power and presents the annual budget. To be clear, an appropriations bill for the relevant period is required to obtain a vote on account. But there's also a presentation of the interim Budget estimates for the entire year.
Let us tell you that Finance Minister Arun Jaitley was not able to present the budget before the 2019 general elections. Piyush Goyal presented the budget in his place because Arun Jaitley's health was poor.
Why Doesn't The Full Budget Come In An Election Year?
The interim budget releases the government's expenditure, revenue, fiscal deficit, financial performance and estimates for the next few months. Whereas in the full budget, the accounts of the entire financial year are presented.
The full budget does not come in an election year. After the elections are over, the new government brings the budget. It is noteworthy that Finance Minister Nirmala Sitharaman presented her sixth budget in the Lok Sabha this time.
Can The Government Make A Big Announcement In The Interim Budget?
Although the government is not prohibited by the Constitution from altering the tax system in the interim budget, this has not historically been the case.
But moderation hasn't been applied consistently. In 2004, Jaswant Singh declared that the long-term capital gains tax on shares would be waived for an additional three years.
In 2014, P Chidambaram revealed reductions in excise duties for capital goods and vehicles. In 2019, Piyush Goyal announced various tax reliefs and introduced the PM Kisan income support scheme for farmers, which required an outlay of approximately Rs 75,000 crore.