Interim Budget to be presented on Feb. 1

What to know?

• Finance Minister Piyus Goyal will present the interim Budget for the financial year 2019-20 on February 1, 2019.
• The Ministry has already sought inputs from Union Ministries. It would be the last budget of the NDA government before the Lok Sabha election.
• The Ministry began the budgetary exercise last month. During the process, meetings were held with the Ministries of Steel, Power, Housing and Urban Development and others to finalise revised expenditure for the current fiscal and projections for the next financial year.
• The Ministry will impose quarantine to bar the entry of media persons into North Block, the seat of the country’s Finance Ministry, from December 3.

What is the process of Budget approval? What will happen if a Budget is not presented before said date?

• The Finance Minister introduces the Budget in the Lok Sabha by way of a speech and gives an overview of the Budget. He then tables it in Rajya Sabha.
• Both Houses of the Parliament then allot time for a general discussion on the Budget, to which the Finance Minister replies at the end.
• Lok Sabha then takes up a discussion on each ministry’s expenditure proposals. After this prescribed period, known as the Demand for Grants, the Speaker applies what is called the ‘guillotine’.
• Once the ‘guillotine’ is applied, all outstanding demands are put to vote. Though both the Houses of Parliament discuss the Budget, only the Lok Sabha votes on it.
• The Appropriation Bill is then introduced after all demands are passed, and once this Bill is passed, the government receives authorisation to draw from the consolidated fund.
• Once the Appropriation Bill becomes an Act, the Finance Bill is passed. Once this is done, the final Budget gets approved.
• If the Budget is not passed within the announced date, Article 116 of the Constitution empowers the Lok Sabha to pass the Vote-On-Account, a document which covers only the expenditure incurred.

Confusion over full budget and interim budget: –

• As some TV channels ran the story that it would be a full-fledged Budget, the finance ministry intervened and clarified that it will be called ‘Interim Budget 2019-20’.
• This Budget will be called Interim Budget 2019-20 and, therefore, don’t have any confusion on this issue
• Full-fledged budgets are titled “Union Budget”, while interim Budget are titled Interim Budget. 
• Even full-fledged budgets are not titled General Budget. General Budget is a terminology earlier used to differentiate between the Union Budget with the Railway Budget. Since 2017-18, the Railway Budget has been merged with the General Budget.
• According to the convention, interim Budgets do not contain any direct tax proposals that might require an amendment to the Income Tax Act.
• The Finance Bills accompanying the interim Budget are short 7-10 page documents meant to extend the existing budgetary provisions from April 1 to July 31, by which time it is assumed that a new or returning government would have prepared and presented a full Budget for the financial year.
• Past interim Budgets have changed indirect tax rates, but, with the goods and services tax (GST) now in the purview of the GST council, if a finance minister follows the set convention, he could now only touch customs rates. There is no law that prevents a government from presenting a sixth full Budget.

(National, Economy)(The hindu, business standard)

Pic courtesy:ZeeBusiness