Sitting NDA government finance minister Piyush Goyal proposed their Interim Budget today. What is an Interim Budget and why is it proposed ?
“Union Budget of India” stands for Annual financial statement by Government of India. It includes all the spendings and earnings of the government in previous years and its plans for financial spending for upcoming fiscal year.
Fiscal year stands for the time period used by governments for accounting and budget purposes which varies from country to country. United State’s fiscal year begins 1st October and ends on 31st September. In India, fiscal year starts from 1st of April and ends on 31st March.
Budget is presented by the government on the month of February. It gives time for the government to debate on the new budget and materialise it before the commencement of next fiscal year in April. The Budget must be approved by both the houses of the Parliament. Traditionally budget is proposed by the government on the last day of February. But in 2017, the NDA government changed the tradition by proposing the budget on start of February.
Interim budget is passed when the sitting government is due to expire before the start of next fiscal year. It can also be presented when the sitting government does have any time to debate on it. This case is known as “Vote on Account”. Vote on Account is different from Interim Budget. Vote on Account deals only with expenditure of the government while Interim Budget deals with both expenditure and receipts.
While law does not bar any government from making tax changes on interim budget, governments have avoided making major changes in taxes until 2019, when sitting NDA government made changes to income tax slabs.
You can read significant features of 2019 budget here.