Interim Budget 2024: How is it prepared? Difference between Interim and Union Budget

Budget 2024: The Interim Budget 2024 will be presented by Finance Minister Nirmala Sitharaman on February 1. It will be her sixth Budget presentation as finance minister. All eyes are on the finance minister as this is the last budget of the current Lok Sabha. However, for the uninitiated, this is only an Interim Budget and the full Union Budget will be presented once the new government is elected in the 2024 general elections. 

As Budget 2024 presentation draws near, here is a lowdown of the basics of the budget:

Budget 2024: Preparation

The budget is a financial statement that discloses in detail the estimated receipts and expenditures of the government for the forthcoming year and a review of the current fiscal year. The process of making the budget starts months before the presentation on February 1, normally in the third quarter of the financial year.

The process commences with various ministries providing their initial estimates of planned and non-planned expenditures. This is then discussed with the Planning Commission, who also decide on allocation of resources and the new programmes that can be undertaken based on the estimates. 

Once the estimation of expenditure is complete, an assessment of expected revenues inflows into the treasury is done. After the estimates of revenue and expenditure, they are matched together for the estimate of expected shortfall in revenue, after which the level of borrowings is looked at to meet the deficit.

After the fiscal deficit and budget deficit targets are decided, the remaining shortfall is filled through tax revisions, adjustments made to expenditure etc. 

The budget is then presented on February 1, after which the Parliament approves it.

Budget 2024: Interim Budget vs Union Budget

The Interim Budget is a temporary financial plan announced before a new government is set to come in after general elections. It can be understood as a provisional arrangement to meet the expenditure of the government for a short period till the new government comes in and makes the new full budget. 

The full-year Union Budget is a comprehensive financial plan to cover all the aspects of government spending, revenue generation, policy reforms and more for an entire fiscal year.

An Interim Budget allocates funds for essential government operations, ongoing schemes and urgent requirements. Since it is not a budget for a full year, it refrains from policy reforms. The Interim Budget also has lesser scrutiny and debate in the Parliament. Only approval for necessary expenditure if sought until the new government presents a comprehensive budget. 

The Union Budget takes into account all the revenues and expenditures, introduces new policies, schemes and reforms aimed at economic and social growth, as well as undergoes a strict examination and discussion in the Parliament. 

Also read: Budget 2024: When and where to watch live streaming on Budget day

Also read: 2023 Budget Highlights vs 2024 Budget Expectations: Key measures for focus groups, tax relief, investment boost