Interim Budget 2024: How is the interim Budget different from the Annual Budget?

Today, Finance Minister Nirmala Sitharaman will introduce the Interim Budget 2024. As the finance minister, this will be her sixth budget presentation. Since this is the final budget of the current Lok Sabha, all eyes are on the finance minister. For those who are unaware, this is really an interim budget; the final union budget will be unveiled following the general elections in 2024, which will elect a new administration.

An interim budget is a short-term financial plan that is presented prior to the general elections that will usher in a new government. It can be viewed as a temporary solution to cover government expenses until a new government takes office and creates a new, complete budget.

The Union Budget for the entire financial year is a detailed financial plan that addresses every facet of government expenditures, revenue collection, policy changes, and more.

In terms of Article 112 of the Constitution the President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, referred to as the “annual financial statement''. Receipt and disbursements are shown under three parts in which government accounts are kept, viz. (i) Consolidated Fund, (ii) Contingency Fund, and (iii) Public Account.

However, the incumbent administration cannot present the complete budget in an election year due to the possibility of an executive change after the polls. Consequently, a temporary budget is needed. Since there is no constitutional provision for an interim budget, the Center may choose to use the votes on account provision to urge the Lower House to approve the funds required for the transition period (April to July) until the next administration submits a complete budget.

All About Previous Interim Budget

Similar to this year, former Finance Minister Piyush Goyal presented the previous interim budget in 2019. The finance ministry was added to Goyal's responsibilities because of Arun Jaitley's poor health. On February 1, 2019, he delivered the 2019–20 interim budget.

Although Goyal made several significant adjustments to that year's interim budget, interim budgets are generally thought to include no significant policy changes.

Some of the key announcements previous interim budget in 2019 were:

Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN)

The Pradhan Mantri Kisan SAmman Nidhi (PM-KISAN)” to extend direct income support at the rate of Rs. 6,000 per year to farmer families, having cultivable land upto 2 hectares is announced.

Rashtriya Gokul Mission

One hundred and fifty crore rupees was been aside for the Rashtriya Gokul Mission. It was declared that Rashtriya Kamdhenu Aayog would be established in order to improve cow productivity and output while also advancing sustainable genetic upgrading of cow resources. The Aayog would also oversee the efficient execution of legislation and programs for the welfare of cows.

Department of Fisheries

FM Goyal continued, "The Government has decided to create a separate Department of Fisheries in order to provide sustained and focused attention towards development of Fisheries." According to the Finance Minister, the government hopes to support growth of more than 7% through this move in order to improve the lives of the 1.45 crore people who depend on this industry.

Crop Loans

When natural calamities strike, farmers are generally unable to repay their crop loans. The Finance Minister said, “Presently, the crop loans are rescheduled for such affected farmers and they get benefit of interest subvention of 2% only for the first year of the rescheduled loan. Our Government has now decided that all farmers affected by severe natural calamities, where assistance is provided from National Disaster Relief Fund (NDRF), will be provided the benefit of interest subvention of 2% and prompt repayment incentive of 3% for the entire period of reschedulement of their loans.”

GST

The Government wants the GST burden on home buyers to be reduced and accordingly the GST Council was moved to appoint a Group of Ministers to examine and make recommendations in this regard at the earliest. Shri Goyal said that soon, businesses comprising over 90% of GST payers will be allowed to file quarterly return.

Expectations From Budget 2024

Green Sector's Expectations

The FM's interim Budget is expected to facilitate financing for green energy projects, which the renewable and new energy sectors are hoping for.

Share Market's Expectations

The markets gained around 1% after wiping out their morning losses. The Nifty was up 198.90 points, or 0.92 percent, at 21,721 at 11:58 am, while the Sensex was up 661.80 points, or 0.93 percent, at 71,801. 1,050 shares fell, 2,136 shares increased, and 68 shares remained constant.

Home-buyers Expectations

Homebuyers want to lift the limitation of Rs. 2 lakh on rental property, raise the permissible deduction limit for interest paid on home loans to at least Rs. 3 lakh, and relax the TDS regulations for purchasing real estate.

Farmers' Expectations

After the government's harsh measures to control skyrocketing food prices last year, such as prohibiting the export of rice, wheat, and sugar, cut farmers' incomes, economists anticipate the government will provide farmers with more financial help. Around 65% of India's 1.4 billion population live in rural areas, where poor rainfall has a negative impact on crops and prospects.