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What is the EC’s decision?
- The Election Commission allowed the Centre to present the Union Budget on February 1 ahead of the Assembly polls.
- But the EC said that the schemes related to the poll-bound states cannot be announced.
- It added that the Finance Minister’s speech should not refer to the government’s achievements in these states.
- It also reminded the government of a 2009 advisory which said vote-on-account instead of a full-fledged budget is presented ahead of elections as per convention.
- In an election year, like it was in 2009, the Government would instead present a vote on account (VOA) or an interim budget.
What is a vote-on-account?
- VOA literally means a vote on the accounts of the government.
- During parliamentary elections years, till a new government takes over, the caretaker government needs funds for various routine items of expenditure like staff salaries.
- According to the Constitution, the government cannot spend any money without Parliament's approval.
- Hence, VOA is taken whereby a government gets parliamentary approval to run the government for a few months.
What are the restrictions on a VOA?
- Typically, no changes are made to tax and duty structures and no new schemes are announced in vote-on-account.
- However it can extend coverage or allocate more money to an existing scheme.
Why VOA is used?
- Constitutionally, there is no distinction between a caretaker government and a regular one.
- The government could technically present a full budget.
- However, by convention, a government that is at the end of its tenure opts for a vote-on-account since it is regarded as improper that an outgoing government should impose its policies on its successor.
- Also in election years a full budget would tempt governments to resort to populism and may spend rampantly.
- Interim budgets have also been used by governments taking office just before the financial year begins to get Parliamentary approval for immediate spending.
How is a VOA different from interim budget?
- VOA and interim budget are often interchangeably used.
- VOA generally deals only with the expenditure side of the government's budget, whereas an interim budget includes both expenditure and receipts.
- Generally, a VOA is for two or three months, usually till the time it is replaced by a regular budget.
- It cannot be for a period longer than six.
Category: Mains | GS-III | Economy
Source: Business Line
