It’s that time of the year again — when all eyes are on the Finance Ministry and what it has in store for the taxpayers. Come Feb 1, Finance Minister Nirmala Sitharaman will present the eagerly-awaited Interim Budget for the financial year 2024-25 in Lok Sabha post the release of the Economic Survey of India.

While expectations run high for the Budget 2024, especially with regard to tax rebates, home loan interests, and potential tax cuts on crypto assets, the Centre is also expected to release the Economic Survey 2024, a day in advance of the Interim Budget.

What is the Economic Survey?

The Economic Survey is meant to be a reality check on the state of the Indian economy over the last 12 months. Typically, the survey is released a day ahead of the Union Budget, with the tradition dating back to 1964.

Who Will Present It?

The Economic Survey 2024 is being prepared by V Anantha Nageswaran, the Chief Economic Advisor to the Government of India, and it will be presented in the Parliament by FM Sitharaman on Feb 1, 2024.  The survey will offer some context to the government’s decisions that shaped its policies in the past year.

Why is the Economic Survey Important?

In recent years, the Economy Survey has been released in two volumes. While the first highlights major economic developments, the other offers an in-depth analysis of key issues, such as climate, poverty, education, and healthcare.

A CNBCTV18 report said the government will release a “concise” document this year that will put into perspective the Indian economy’s health over the past 12 months – which marks a shift from traditional norms. The document will contain several crucial numbers — including GDP growth prediction, oil prices, inflation, etc.

What Exactly is an Interim Budget?

Instead of releasing a comprehensive budget right before the elections, the government presents an interim budget. Essentially, an interim budget is a provisional financial plan devised by the government for a few months in any given fiscal year.

It is typically presented when a government is about to complete its five-year tenure or in the middle of a transition. With India gearing up for general elections in 2024, FM Sitharaman will table a temporary budget until the election results are declared.

The interim budget will give the Narendra Modi-led government spending rights until March 31, which will also mark the end of the current fiscal year. Election Commission guidelines prohibit the outgoing government from announcing any major policy changes in the interim budget, as it can tip the election results in its favor.

FM Sitharaman is on the cusp of becoming the first woman finance minister to have presented six Budgets. In turn, she will leave behind her “Guru” and former finance minister Mr. Arun Jaitley. Sitharaman has reportedly said that the upcoming Feb 1 budget will just be a vote-on-account, instead of an interim budget.

What is a Vote-On-Account?

The terms Interim Budget and vote-on-account are often used interchangeably but they are different in some ways. While an interim budget outlines the state of the economy, government’s expenditure needs, and receipts, the latter only consists of expenditures needed for funding ongoing projects, salaries of central government employees, and other expenses.

Furthermore, the vote on account is just a formality and doesn’t require discussions. Once the Parliament passes the vote on account, Sitharaman will receive the nod to meet the government’s expenditure needs for the first four months of 2024-25.

Also Read: Budget 2024: How Is the Economic Survey 2024 Different From Its Predecessors?

 

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Filed under: News - @ January 1, 1970 12:00 am