New Delhi: The current government will soon have to wind up shop as the tenure ends and so will the financial year.
The Finance Ministry is busy deciding the direction of Indian cash flow.
Instead of the Union budget, the Finance Minister will table a Vote-on-Account.
For five consecutive years, the then finance minister, P Chidambaram had presented how India was going to raise and spend its money. This time around though, it won't be the same face or format.
External Affairs Minister Pranab Mukherjee dons the role of FM precisely 25 years after he presented the last Budget. But instead of a full Budget, he will table a Vote-on-Account.
CV Madhukar, the CPR explained it thus: “Because the elections are coming up, to say that look, I would like to spend money for the next four months while the whole thing is in a limbo and then when i come back to power or a new government is formed, then the new government can make its own new budget.”
The first vote-on-account was presented in 1951 and since then, every time the government changed hands. The last vote-on-account being 2004, by former finance minister Jaswant Singh.
So India has seen 15 vote on accounts in the past six decades and yet not many are aware of the term, fewer really know what it means.
A vote-on-account presents an estimate of expenditures to be sanctioned by the exchequer till the budget is passed
The budget announces new programmes and estimates the public expenditure for the fiscal year.
A vote-on-account cannot alter direct taxes since they need to be passed through a finance bill.
In the budget, fresh taxes may be imposed, old ones may go. Direct taxes like income tax and indirect taxes are both open to change
What's common though is that both include the previous year's financial performance of the government.
The significance :
The government cannot present a full budget because in such a short session, there's no time to debate proposals in the Parliament.
Expenditure for new schemes will have to form part of the new budget, which can be approved only after 1 April.
Also, it is ideally the new government's prerogative to decide how it'll raise and spend money.
The newly formed government cannot be burdened by the previous government's budgetary allocations.
While these are the technicalities, many look upon the vote on account as election rhetoric. Many look at it as a window where the government tom-toms achievements ahead of elections.
Yogendra Yadav, Senior Fellow at CSDS said, “But I do not think that the voters reward you for doing that. Voters reward you for what you did in the first four years rather than what you did in the last six months.”
Whether or not the government succeeds in wooing the voter, the fact is that India is battling an economic meltdown.
The government will have to take steps to reboot the economy. What remains to be seen though is whether these steps will be a part of the vote-on-account.