Budget 2019: The Bharatiya Janata Party (BJP)-led NDA government is all set to unveil the Interim Budget 2019 on Friday, 1 st February 2019, this week. Internet is abuzz with expectations from the centre’s last Interim Budget 2019 or Vote on Account, and amidst all the uproar if you wondering how an Interim Budget is different from a Full Budget, then let us draw a point by point difference between an Interim and Full Budget. An Interim Budget is generally presented in an election year. During an Interim Budget, the outgoing government tables its proposal for meeting expenses in the parliament for the months left for its tenure until a new government is formed after Lok Sabha polls. The outgoing government jots down each and every expense for the next 3-4 months that needs to be funded from the Consolidated Fund of the country. Whereas, a Full Budget is presented for a full year by the incumbent.

An Interim Budget is presented to ensure smooth functioning of all departments during this transitional phase. The Full Budget that follows an Interim Budget and is the first budget of the new government’s five-year tenure usually comprises of schemes/subsidies on the poll promises, tweaks in the tax structure and new economic policies that define the vision of the new government and lay a roadmap to accomplish fiscal and developmental goals in the next five years.

Any budget is divided in two parts; in the first phase, the current government presents a report on the income generated and expenses incurred in the previous year, and the second phase presents an estimation of income and expenses in the upcoming year. During an Interim budget, the first phase remains same, however, the second phase is limited to income and expense estimations for just the pending days of the current government at the centre.

During a Full Budget, new policies, schemes, restructuring of direct and indirect taxes and a lot more is expected from the incumbent; while in an Interim Budget the outgoing government generally refrains from any new major fiscal or budgetary allocations or tax changes. However, as per any rule book, the outgoing government is not barred from introducing new policies in its Interim Budget subject to the announcement of any major policy changes that are intended to influence voters. The Election Commission of India restricts the outgoing governments from making such policy changes that are out of the way and are primarily aimed at wooing voters only.

Going by the history of Interim Budgets in India, few finance ministers have gone ahead in the past to present no less than Full Budgets even while standing at the doorway of elections in that year. Interim Budgets are also like mini election manifestos of the outgoing governments.

Ethically speaking, the right to present a Full Budget comprising of new announcements, new visions and new policies must lie with the new government for the complete year; irrespective of whether the incumbent makes a comeback or the current opposition assumes power depending on the outcome of General Elections.