Interim Budget - What is Interim Budget? [UPSC Indian Polity Notes]

The interim budget is an important concept that is seen in the news every year. It is different from a regular government budget. In this article, you can read what an interim budget means and how it is different from a regular budget as well as from a vote-on-account. This is an important topic for the IAS exam.

What is an Interim Budget?

An interim budget is presented by the government in the Parliament if it does not have the time to present a full budget, or if the general elections are around the corner. If in case the elections are nearing, it is only correct that the incoming government frame the full budget.

  • A full budget gives the government of the day spending rights until the end of the financial year (which ends on 31st March).
  • In case, the government is not able to present the full budget before the end of the financial year, it will require parliamentary approval for incurring expenditure in the new financial year until a new budget is passed.
  • Until the Parliament discusses the budget and passes it (for the whole year), through the interim budget, the government passes a vote-on-account which will allow the government to meet its expenses of administration.

Read the key facts about Union Budget 2020 in the linked article.

How is an interim budget different from a regular budget?

  • The vote-on-account passed through the interim budget, seeks parliamentary approval for the government to meet expenses for a part of the fiscal year.
  • It is not practical for the government to present a full budget when there are elections nearing, so the government presents an interim budget, which is like a budget for the transition period (few months remaining in power).
  • But, like a regular budget, the estimates are presented for the whole year.
  • When the new government frames a new budget, it can concur with or change the estimates as it deems fit.
  • The Constitution gives the government the power to make changes in the tax regime in the interim budget.
    • However, in all the 14 interim budgets that the various governments have presented so far, no major tax changes or new schemes have been announced respecting the fact that the government is going to be in power only for a few months.
  • Generally, an annual budget contains two segments –
    • Report on the previous year’s income and expenses
    • Proposed income generation and expenses for the coming year
  • In an interim budget, the first part is the same as the annual budget, i.e., the previous year’s income and expenses. However, only a documentation of the proposed basic expenses till the elections are included in the interim budget.
  • In an interim budget (because it is close to the general elections), the Election Commission has given regulations to the effect that any major policy changes that can influence the voters unfairly are not permitted.

You can read important terms and concepts related to the Union Budget, in the linked article.


The vote-on-account is passed through the interim budget.

  • It allows the government to meet its expenses in the short period leading up to the elections.
  • The vote-on-account is passed as a convention without discussion, as opposed to a full budget where the budget is passed only after discussions are held.
  • It is like a grant-in-advance to the government to function properly until the voting on the demands for grants, as well as the passing of the Finance Bill and the Appropriation Bill.
  • The sum of this grant is 1/6th of the estimated expenditure for the whole year under various demands for grants.
  • The vote-on-account is valid for two months usually. The full budget is valid for a year.
  • A vote-on-account contains only the expenditure of the government whereas the interim budget deals with both receipts and expenditure.

You can get an analysis of the interim budget 2019 – 20 in our ‘Economy This Week’ segment here.

Interim Budget:- Download PDF Here

Aspirants read about ‘Interim Budget’ can also read other Indian Economy & Polity related topics linked in the table below:

Become familiar with the general pattern of the exam by visiting the UPSC Syllabus page. For more UPSC related preparation materials, visit the links given below:

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