As the name suggests, the Interim Budget refers to a temporary financial plan disclosed before the new government is all set to establish following general elections in the country. Think of it as an interim arrangement presented to meet the expenditure of the government until the new governing body is established and makes the final full budget.
Preparation of the Budget 2024
Since the Lok Sabha elections are scheduled to take place in the summer, all eyes are on Minister Sitharaman as she presents her sixth Budget presentation as the Finance Minister.
- The process of creating the budget starts at least a month before the presentation or in the third quarter of the financial year.
- The process begins with the ministers providing their estimates about planned and unplanned expenditures of the government.
- This is then discussed with the Planning Commission which looks after the allocation of resources and decides new programmes which can be presented based on these estimates.
- Once the assessment of revenue and expenditure has been completed, they are compared to ascertain an estimate of the shortfall in revenue and the required borrowings.
- Finally, the remaining shortfall is filled by making adjustments in expenditure and tax revisions.
Also Read: How to Become a Budget Analyst in India?
How is the Interim Budget Different from the Annual Budget?
Here are the key differences that highlight how is the Interim Budget different from the Annual Budget of our country.
|The Interim Budget is presented before a new government is formed.
|The Annual Budget is presented before the start of the fiscal year.
|It is a temporary financial plan to meet the immediate expenses of the government until the new government is formed.
|It contains a comprehensive financial plan of the government for the entire fiscal year.
|It does not introduce major policy changes and focuses on essential expenditures.
|It includes everything from policy changes to allocations for the entire fiscal year.
|Interim Budget requires approval from the parliament and legislative body of the country.
|The Annual Budget goes through the entire budget approval process including approvals by the parliament, the legislature, debates, and so on.
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The Interim Budget contains all the expenses of the government for the ongoing fiscal year. It also discloses estimates but does not include the primary policy changes or new initiatives as planned by the government.
On 1 February 2024, Finance Minister Nirmala Sitharaman presented the interim budget around 11 AM.
There are three categories of budgets including a surplus budget, a balanced budget, and a deficit budget.