In a recent statement, Finance Minister Nirmala Sitharaman announced that the upcoming budget for 2024 would not include any “spectacular announcements.”
This is because the budget is expected to be a vote on account, as the country gears up for the general elections.
Budget 2024: A Vote on Account
According to Sitharaman, the budget that will be announced on February 1, 2024, will serve as a vote on account.
This means that it will only cover the government’s expenditure until a new government is formed after the general elections in the summer of 2024.
Following the British tradition, the February 1 budget is designated as a vote on account, which limits the scope for any major policy changes or new initiatives.
During a speech at the CII Global Economic Policy Forum, Sitharaman emphasized that no spectacular announcements should be expected during the vote on account period.
This is because the primary objective of the budget during this time is to meet the basic expenditure needs of the government until a new administration is in place.
Any major policy decisions or financial reforms will have to wait until the new government comes into power and presents the next full budget in July 2024.
Interim Budget for 2024-25 Fiscal Year
On February 1, 2024, Sitharaman will present an interim budget for the fiscal year 2024-25, which will commence on April 1, 2024.
This interim budget, also known as a vote on account, allows the incumbent government to carry out essential expenditures until a new government is formed after the general elections.
It serves as a bridge to ensure the continuity of government operations and ensures that essential services are maintained during the transition period.
As the Lok Sabha elections are scheduled for the summer of 2024, the government will be in full election mode by the time the budget is presented.
Sitharaman highlighted that the budget announcement in February serves as a preparation for the upcoming elections.
This further reinforces the focus on maintaining essential expenditure rather than introducing any significant policy changes or reforms.
Things at a Glance
Finance Minister Nirmala Sitharaman’s announcement about the budget for 2024 being a vote on account highlights the unique circumstances surrounding the general elections.
As the government prepares for the elections and operates in a limited capacity, no spectacular announcements or major policy changes are expected during this period.
The budget will primarily focus on meeting essential expenditure requirements until a new government is formed.
It is crucial for businesses and individuals to be aware of these limitations and plan their finances accordingly.