What is an interim budget?

What is an interim budget?

An interim budget is presented by a government in its last year in office when general elections are due after the start of a fiscal. During the transition period for meeting day-today expenses, the government needs the approval of Parliament to draw money from the Consolidated Fund of India, which is where the government puts in all its revenue. While a vote-on-account is an alternative to an interim budget, the latter has full estimates of both revenue and expenditure and can contain policy measures unlike the former, which is only an estimate of expenses required during the transition period.

What are the dos and don’ts in an interim budget?

The incumbent finance minister does not usually announce major tax breaks that could financially burden the next government. But populist sentiment ahead of polls usually gets the better of the minister. P. Chidambaram, while presenting the 2014-15 interim budget for the United Progressive Alliance government, announced the One Rank One Pension scheme for the armed forces. Jaitley later criticized him for providing only ₹500 crore under the scheme in his interim budget, a pittance compared to the annual financial implication of the scheme at around ₹7,500 crore