Interim Budget 2024: There are just nine days left for the Interim Budget of FY 2024-25 presentation in the Parliament. Union Finance Minister Nirmala Sitharaman is scheduled to deliver her Budget speech on February 1. A few years ago, the budget used to be presented at the end of February. But the NDA government, led by PM Narendra Modi, shifted the year-old tradition of presenting the budget from February 28 to February 1.
In 2017, Arun Jaitley, former Union Finance Minister, declared that the Union Budget would no longer be presented on the final working day of February, as was the practice during the colonial period.
The Annual Financial Statement, also known as the Union Budget, is a government document that presents projected expenses and revenues for the upcoming fiscal year. It is submitted to Parliament for approval. This tradition originated in the 1860s when officials of the East India Company introduced it in India.
Why was the presentation date changed?
Former FM Jaitely initially stated that the budget would be presented on February 1 instead of the last day of the month to end the 92-year-old practice followed during the colonial era under British rule.
He also mentioned that as the Budget is presented at the end of February, the government had very little time to prepare for the new policies and changes that would take effect from April 1. Therefore, the date of the Budget presentation was moved to February 1.
In addition to this, Jaitley abolished the tradition of presenting a separate Budget for Railways, which had been practiced during the British rule. The FM announced that the Railways Budget would be integrated with the Union Budget.
Other changes
Until 1999, the Union Budget was presented at 5 pm on the final day of February. This practice, inherited from British India, remained unchanged even after Independence.
The timing of the presentation during the colonial era was determined by Britain's local time. In that period, the Budget was presented in Britain at 11 am (local time), which corresponded to 5 pm in India.
Later in 1999, Yashwant Sinha, who was the Finance Minister in the Atal Bihari Vajpayee-led NDA government, proposed that the Union Budget should be presented at 11 am.
The rationale behind this change was to allow sufficient time for a more thorough analysis of the numbers, leading to more informed debates and discussions.
Following the approval, Sinha became the first FM to present the Union Budget at 11 am in the history of Independent India. Since then, the Union Budget has been presented at 11 am every year.
Interim Budget
This year, the budget statement will not have any major announcements and will be considered a placeholder till the 2024 Lok Sabha elections are held and the new government is formed.
An interim Budget, similar to a full Budget, is deliberated and approved in the Lok Sabha. However, in the case of a vote-on-account, it is passed without extensive discussion.
While an interim Budget has the authority to propose alterations in the tax system, a vote-on-account is unable to modify the tax regime in any situation. It serves as a parliamentary endorsement for withdrawing funds from the Consolidated Fund of India from April to June/July or until the new Government presents its comprehensive Budget.
As per the code of conduct of the Election Commission of India, the outgoing government will be restricted from implementing any major tax and economy-related measures to avoid influencing voters. Additionally, according to the Finance Minister, taxpayers will have to wait until the new government assumes office in July.
Also read: Interim Budget 2024: Govt may revise tax exemption in lower bracket for Old Tax regime, say sources