With Lok Sabha elections scheduled soon, a full budget will not be presented on Feb. 1. Finance Minister Nirmala Sitharaman will present an interim budget this year. But for such a short period prior to a general election, there is also an option for a vote on account. Here's decoding a vote on account:
Reading about the Union Budget, you might have stumbled upon the term ‘Vote-on-Account'. Do you know what it means?#Budget2019 pic.twitter.com/ke7aNJNjuc
January 15, 2019What Is Vote On Account?
A 'Vote on Account' is used by the government when there is not enough time to pass the full budget before the start of the new financial year. This happens in an election year.
A vote-on-account seeks approvals for essential expenditure outlays until after the general election. It is different from an interim budget that includes an assessment of the current state of the economy, capex and receipts, as well as revised estimates of the current financial year and estimates for the year ahead. According to Parliamentary Affairs Minister Pralhad Joshi, Finance Minister Nirmala Sitharaman will present the interim budget on Feb. 1.
Why Vote on Account Is Needed
In an election year, the outgoing government presents an interim budget or seeks a 'vote on account' rather than a full budget. This is because the incoming government will be responsible for preparing and presenting the complete budget.
According to the Constitution, the government cannot withdraw money from the Consolidated Fund of India without legal approval. This legal process involves passing an appropriation bill as part of the budgetary procedure. However, this bill's passage through Parliament and its enactment into law can be time-consuming. Vote on account is a procedural step that usually bypasses an extensive debate.
Process of Implementing a Vote on Account
The Vote on Account is presented in Parliament like a regular budget. It is usually part of the interim budget presented by the Finance Minister. However, unlike the full budget, the Vote on Account only deals with the expenditure side and does not include any proposals for taxation or other revenue aspects.
After the presentation, the proposal for the Vote on Account is discussed in both houses of the Parliament. Members discuss the proposed expenditures. There is no discussion on taxation or other revenue measures, as these are not part of the vote on account.
The vote on account is put to vote in the Parliament. It needs to be passed by both the Lok Sabha (House of the People) and the Rajya Sabha (Council of States). However, the Rajya Sabha has limited powers in financial matters; it can only discuss the vote on account but cannot vote to amend or reject it.
The vote on account is valid for two months. However, in the case of Parliamentary elections, it can be extended to cover the period until the new Parliament is in place and able to pass the full budget.
Significance of Vote on Account
The significance of the vote on account is ensuring the continuity of government operations. During election years or when it is anticipated that the budget session will be prolonged, a vote on account helps in avoiding any disruption in government services. It ensures that there is no gap in funding for essential services and ongoing projects.
Financial Implications of Vote on Account
The vote on account allows the government to maintain financial operations and ensures that there is no unauthorised or unaccounted expenditure from the public funds.
However, since the vote on account is essentially an interim budget, the government refrains from announcing any major financial decisions during this period.
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