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Vote on Account: Definition and Importance

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Definition: A provision under Article 116, vote on account, is the Parliament’s permission to the outgoing government to make use of the ‘Consolidated Funds of India’ to meet the short-term expenses until the new financial year starts.

During an election year, the running government does not present a full budget for the entire financial budget. To cover the short-term expenses lined up, the government, in a caretaker role, therefore presents a Vote on Account or interim budget. The next elected government will be responsible for presenting a full-fledged Union Budget. 

Simply put, a vote on account is a financial arrangement for a few months until a new government is formed. The recent Interim Budget 2024 presented on 1st February this year is a classic example of a vote on account. As 2024 was an election year, the present Modi Government presented the Interim Budget, or sought a vote on account, in February 2024 instead of presenting the full budget. Union Budget 2024 was presented by Finance Minister Nirmala Sitharaman on 23rd July 2024.

A vote on account allows the government to take money from the Consolidated Fund of India for a short time which is usually two months. After the 1st of April, as the new financial year begins, the government needs permission for every spending. It’s a simple process that typically doesn’t involve budget. If elections are coming up soon after the start of a new financial year, the government might ask for a vote on account for up to four months. This gives Parliament temporary permission to spend money. Unlike a full Budget, which includes detailed plans for spending, taxes, and policies, a vote on account is just a quick way for the government to get the funds it needs in the meantime.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory. For All Disclaimers Click Here.

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