Finance Minister Nirmala Sitharaman before presenting the Interim Budget in the Parliament. (Image: X/@ANI)
Sitharaman, the first full-time woman Finance Minister of India, has presented six budgets, including one interim budget.
Nirmala Sitharaman on Wednesday assumed the charge of union finance minister for her second consecutive term and is set to present the second budget in July 2024.
All eyes are now on the full budget, where she is expected to outline the vision for the next five years along with key policy announcements. Additionally, she will focus on addressing unemployment by implementing measures to boost manufacturing.
Sitharaman, the first full-time woman Finance Minister of India, has presented six budgets, including one interim budget. In the interim budget for FY25, she adhered to tradition by sticking to vote-on-account measures only.
Here’s a detailed explanation:
Interim Budget: Early in the year, the Finance Minister presented an interim budget on February 1. This interim budget is a temporary financial statement meant to keep the government running until the new government takes office.
The interim budget includes expenditures and necessary allocations but usually avoids major policy announcements or changes. This practice ensures continuity of government functions and funding until a new government is formed post-election.
Full Budget: After the general elections, the newly elected government will present a full budget for the financial year. This year, it is expected that the government will present its budget in July/ This full budget will detail the new government’s economic policies, expenditures, and revenue plans for the entire fiscal year. It reflects the new administration’s priorities and policy changes.
Why Two Budgets?
This dual-budget practice ensures that the outgoing government does not make long-term commitments or major policy changes right before an election, allowing the incoming government to implement its financial strategies and policies. This approach is standard practice in India during election years to accommodate the transition between the old and new administrations.
A Union Budget is valid till the end of the financial year on March 31, hence the government has speeding rights only till that date. For the government expenditure occurring between March 1 until a new government is formed, the incumbent government needs permission from the Parliament to incur costs in the interim period. Hence, the interim Budget is released.
