Understanding difference between full budget and Vote-on-Account

New Delhi: Finance Minister P Chidambaram tabled down Vote-on-Account in the Parliament today.

 

Unlike past years, Chidambaram presented Vote-on-Account this time rather than a Full Budget.

 

For all those unfamiliar with the term ‘Vote-on-Account’, here is a small article clearly differentiating the former from ‘Full Budget’.

 

As the incumbent government lacks adequate time in order to vote for a full budget before the new financial year begins, Vote-on-Account is a temporary fiscal measure which guarantees enough funds are at disposal of the incumbent government so that it can run the country, till the time fresh government takes seat after elections.

 

Demystifying Vote-on-Account

 

Based on the expected estimates of the running government, regarding its need for further funds in order to meet expenditure in the remaining three to four months to general elections, Vote-on-Account is prepared by the Finance Ministry.

 

Only after a new government comes to power after elections, a full budget is tabled in the Parliament for the given financial year.

    

 

After the budget is presented in the Parliament and discussed, the former obtains its sanction. Once the approval has been acquired, the Finance Ministry is allowed to withdraw money from the Consolidated Fund of India and therefore, it’s known as Vote—on-Account.

 

Vote-on-Account just involves details of expenditures.

 

 

What’s Vote-on-Account not authorized to do?

 

Vote-on-Account can’t alter prevailing tax rates in the country or come up with new schemes.

 

Generally, a vote-on-account is considered as a ceremonial matter and passed by Parliament without lengthy discussion as witnessed in case of full budget.