Modi govt planning full Budget 2019, not vote on account

What to know?

• The finance ministry plans to present a full budget on 1 February. Budget 2019, which will be the last by the present government ahead of the 2019 Lok Sabha elections in May, going by established practice should be a vote-on-account, with government seeking Parliament approval for expenditure from the Consolidated Fund of India for the interim period.
• If indeed the government goes through with its plans, not only is it signalling its confidence about being re-elected, it is also reworking an established precedent.
• Earlier, the government had advanced the presentation of the Union budget to 1 February so as to let government departments undertake spending from the beginning of the fiscal. Now it is effecting a similar departure on the grounds that an economy of the size of India cannot afford to lose direction in the intervening period till a new government takes charge.
• The government would be sticking to routine and publishing an Economic Survey, essentially the economic report card for 2018-19, though normally this task is left to the next government.
• The government has appointed a panel under former Reserve Bank of India governor Bimal Jalan to select the next chief economic adviser in the finance ministry and so far it has held two meetings to vet 20 applications.
• The Vote on Account is only for three months before the new government presents a full-fledged budget in July. Though some governments have used the Vote on Account to make big ticket announcements. 
• The Narendra Modi government’s knack of doing things differently is likely to continue in the election year as the Centre prepares for a full budget on February 1, doing away with the standard practice of a vote-on-account.
• The move also portrays the government’s confidence in getting re-elected in 2019 Lok Sabha polls.

Union budget Highlights:

• The Union Budget of India, also referred to as the Annual Financial Statementin the Article 112 of the Constitution of India, is the annual budget of the Republic of India.
• The Government presents it on the first day of February so that it could be materialized before the commencement of new financial year in April.
• Till 2016 it was presented on the last working day of February by the Finance Minister of India in Parliament. The budget, which is presented by means of the Finance bill and the Appropriation bill has to be passed by both the Houses before it can come into effect from April 1, the start of India’s financial year.
• An Interim Budgetis not the same as a ‘Vote on Account’. While a ‘Vote on Account’ deals only with the expenditure side of the government’s budget, an Interim Budget is a complete set of accounts, including both expenditure and receipts
• An Interim Budget gives the complete financial statement, very similar to a full Budget. While the law does not debar the Union government from introducing tax changes, normally during an election year, successive governments have avoided making any major changes in income tax laws during an Interim Budget
• Also again in 2017, departing from the colonial-era tradition of presenting the Union Budget on the last working day of February, Minister of Finance (India) Arun Jaitley, in the NDA government (led by Bharatiya Janata Party) of Narendra Modi government announced that it will now be presented on 1 February. Additionally Rail Budget, presented separately for 92 Years, merged with union budget.
• Article 266 of the Constitution of India mandates that Parliamentary approval is required to draw money from the Consolidated Fund of India. Besides, Article 114 (3) of the Constitution stipulates that no amount can be withdrawn from the Consolidated Fund without the enactment of a law (appropriation bill).

Difference between Full Budget and Vote on Account

• Vote on Account is a grant in advance to enable the government to carry on until the voting of demands for grants and the passing of the Appropriation Bill and Finance Bill.This enables the government to fund its expenses for a short period of time or until a full-budget is passed. Normally, the Vote on Account is taken for two months only. The sum of the grant would be equivalent to one sixth of the estimated expenditure for the entire year under various demands for grants.
• As a convention, a vote-on-account is treated as a formal matter and passed by Lok Sabha without discussion. But passing for budget happens only after discussions and voting on demand for grants.

 Can Vote on Account be granted for more than 2 months?

• During election year or when it is anticipated that the main Demands and Appropriation Bill will take longer time than two months, the Vote on Account may be for a period exceeding two months.

  What is an interim budget?

• An interim budget in all practical sense is a full budget, but made by the government during the last year of its term – ie. just before election. An interim Budget is a complete set of accounts, including both expenditure and receipts. But it may not contain big policy proposals.

Is it mandatory for the government to present vote on account instead of full budget in an election year?

• During an election year, the ruling government generally opts for a vote-on-account or interim budget 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.

(Polity, Economics, National)(The hindu, news18,wiki)

Pic courtesy: Oneindia