All You Need to Know About an Interim Budget

Similar to a full Union Budget, the Interim Budget includes estimates of government expenditure, revenue, fiscal deficit, and financial performance for the upcoming financial year.

An Interim Budget is a financial presentation by the government in its final year of office before the Lok Sabha elections. This budget is necessary as the existing budget for the fiscal year 2023-24 is valid only until March 31, and fresh approval is required from the Parliament to withdraw funds from the Consolidated Fund of India to sustain the government's operations. Given that Lok Sabha elections are scheduled for April-May, funds are essential to manage the country until the new government assumes office post-elections. The Interim Budget serves as a practical solution to bridge this transitional period.

Similar to a full Union Budget, the Interim Budget includes estimates of government expenditure, revenue, fiscal deficit, and financial performance for the upcoming financial year. While major tax proposals are generally avoided, the ruling government has the flexibility to make adjustments to certain taxes. For instance, in the Interim Budget preceding the 2019 Lok Sabha elections, the government raised the income tax deduction limit, providing relief to salaried professionals.

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However, the Interim Budget refrains from introducing significant policy announcements that could impose financial burdens on the incoming government, which will present the complete Union Budget. According to the Election Commission's Code of Conduct, major schemes are excluded from the Interim Budget to prevent potential influence on voters.

Additionally, the government does not present the Economic Survey alongside the Interim Budget; this is typically done a day before the main budget presentation. The purpose of the Interim Budget is to ensure a smooth financial transition during the election period, without making long-term policy decisions that should be left to the incoming government.

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(With Agency Inputs)

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