New Delhi: The next government at the Centre will have just over a month to prepare and present a national budget, as expenditure approvals taken in the interim exercise expire on 25 June.
On 18 February, stand-in finance minister Pranab Mukherjee presented an interim budget in the backdrop of a global economic crisis and a sharp fall in India’s growth. On 24 February, Parliament approved the vote-on-account proposal for four months.
Finance ministry officials said the exact timing of the full-fledged budget would be decided only after a new government is formed. Results of the general election will be declared on 16 May.
“The expenditure approvals taken in the recent vote for account are only for a four-month period. The ministry will be ready to present a full budget but the timing is a call the next government will take,” said a ministry official, who declined being named.
Expenditure approvals: Stand-in finance minister Pranab Mukherjee presented the interim budget before the 14th Lok Sabha on 18 Feb. Harikrishna Katragadda / Mint
If the next finance minister wants more time to prepare the budget, the new government will have to request Parliament for another vote on account for a period of its choice.
In the unlikely event of the next government being formed after 25 June, it will then be left to the President of India to provide approval for state expenditure in subsequent months. India’s Constitution provides for such an eventuality.
A former finance secretary said that in the event of instability or a delay in government formation, “a situation akin to governor’s rule arises, where the President can authorise a vote-on-account.” The former bureaucrat spoke on condition of anonymity.
The annual budget exercise typically begins in mid-September every year, nearly six months before it is presented in Parliament on 28 February. This year the finance ministry will have to, therefore, move fast to present a regular budget.