Union Budget 2024: What is an interim budget? Its significance during transitions

The Interim Budget for the fiscal year 2024-25 was presented by Finance Minister Nirmala Sitharaman on February 1. Governments typically present Interim Budgets in the year before elections or during periods of transition. It is traditional for the governing body to avoid presenting a full Union Budget during a year of elections.On the other hand, the finance minister delivers the Interim Budget in a joint session of Parliament's Rajya Sabha and Lok Sabha.

During this presentation, the government seeks parliamentary approval to withdraw funds from the Consolidated Fund of India to cover expenses until the financial year ends on March 31. This practice is a customary procedure before every general election.

An Interim Budget differs from a full budget in its scope and timing

An Interim Budget outlines estimated income and spending until a new government takes charge. In contrast, a full-fledged budget provides detailed government finances, revenue, expenses, allocations, and policy directions for the entire fiscal year, serving as a strategic plan for the nation's economic course.

Before presenting the Interim Budget, governments typically do not release the usual pre-budget ‘Economic Survey’, which traditionally accompanies the Full Budget presentation the day before.

This survey offers insights into the economic landscape by highlighting key events and trends. It is traditionally unveiled in Parliament during the full budget presentation later in the year, when the new government assumes office.

Key elements of an interim budget

An Interim Budget functions similarly to a full Union Budget, providing estimates for government spending, revenue, fiscal deficit, and financial projections for the upcoming fiscal year. Typically presented by the outgoing government as its term nears conclusion, the Interim Budget spans about three to four months to ensure continuity in governance.

It generally outlines the current government’s economic plans for the next few years, depending on its potential re-election.

Limitations of an Interim Budget

An Interim Budget is restricted in scope compared to a full Union Budget. It avoids making significant policy announcements that could obligate the next government responsible for presenting the comprehensive Union Budget. This restraint is guided by the Election Commission's Code of Conduct, which prohibits introducing major schemes that could influence voter sentiment.

Additionally, the government abstains from publishing the Economic Survey alongside the Interim Budget, maintaining a focus solely on financial estimates and continuity rather than introducing new economic strategies.

FAQs

Q. What is the interim budget of India in 2024?

A. Union Budget, 2024-25 will be presented in Lok Sabha on 23 July, 2024.” Union Budget will be presented by finance minister Nirmala Sitharaman on July 23. In the Interim Budget 2024 presented on February 1, Finance Minister Nirmala Sitharaman detailed adjustments in allocations for major schemes.

Q. What is the interim budget?

A. An interim budget is presented by the government in the Parliament if it does not have the time to present a full budget, or if the general elections are around the corner. If in case the elections are nearing, it is only correct that the incoming government frame the full budget.

Q. What is the interim budget for agriculture in 2024?

A. The government has allocated a budget of Rs 1.27 lakh crore for the Ministry of Agriculture for the 2024-25 fiscal year, slightly higher than the current fiscal, according to Interim Budget documents.

Q. Which sector will benefit from the budget in 2024?

A. The upcoming Union Budget 2024-25 can boost the lifesciences sector with supportive policies towards innovation and affordability.