Difference Between Interim Budget and Union Budget

By K Balaji|Updated : January 25th, 2023

The major difference between interim budget and union budget is that the interim budget is the Budget that Government presents during its transition period and on the other hand, the union budget is presented to notify the Government's finances for the complete fiscal year, starting from 1st April to 31st March. Article 112 of the Indian constitution makes the President of India responsible for presenting the Interim or Union budget, whereas Article 77(3) allocates the responsibility to the Union Finance minister on behalf of the President.

Difference between Interim Budget and Union Budget PDF

Interim Budget is a budget presented just before the General elections, while Union Budget is passed without elections. The interim budget is optional, whereas the Union budget must be presented. Here, we will discuss the difference between Interim Budget and Union Budget, and thereafter we will learn about them individually.

Table of Content

Difference between Interim Budget and Union Budget

The main difference between the Interim Budget and Union Budget is that the Interim budget is passed before the general election, whereas the Union budget is passed in the Parliament.

Now let us try to understand the basic difference between Interim Budget and Union Budget on various factors from the table provided below:

Interim Budget vs Union Budget

Difference between Interim Budget and Union Budget

Interim Budget

Union Budget

It is presented just before the general election, and when the Central Government does not have much time to present a full budget, it passes the Interim Budget.

It is an arrangement for the transition phase.

The Union Budget is also called the annual budget.

It is something which Central Government presents in the Parliament.

In the case of the Interim Budget, a Vote-on-account is passed.

This account does not require to be discussed in the Lok Sabha.

There is a full discussion in the Lok Sabha.

Thereafter passing of the Union Budget occurs.

The source of income will be missing from the Interim Budget statement.

One part is related to the Government's previous year's income and expenses, and the other part details the plan of the Government on how it will raise funds and how the same will be used for the nation's development.

The interim budget is submitted before the general elections for 2 to 4 months.

Union Budget, on the other hand, being the primary financial statement of the Government, is for the entire fiscal year.

The Interim Budget only summarizes the previous year's expenses and income.

Union Budget accounts for detailed information about the previous year's expenses and income.

In the Interim Budget, the component of income through taxes is not included.

The Union Budget will have a component of how Government will spend on social welfare measures to bring development to the country, and it will also describe the methods of fundraising through taxes.

Interim Budget and Union Budget

In the Interim Budget, the details of income and expenditure are documented for the previous year and the expenses for the coming months until the new Government comes into power are mentioned. The Union Budget, on the other hand, is a more detailed documentation of the two different parts.

What is an Interim Budget?

The Central Government presents the Interim Budget when it does not have time to present a full budget as the general election is about to happen. The Finance Minister presents it in the joint sitting of Rajya Sabha and Lok Sabha.

  • It contains detailed documentation of every expense and income through taxes for the coming few months, i.e., till the new Government is in place.
  • A vote-on-account is passed via interim budget.
  • The parliament issues this account to manage the expenditure.
  • For this purpose, no formal discussion is required.
  • The interim budget is sometimes called the temporary full budget.

What is Union Budget?

The Union Budget, mentioned in Article 112 of the Constitution of India, is the statement of the Government's estimated income and expenditure for that particular year. It is also known as the annual financial statement.

  • Each financial year must have a Union budget to be presented before a new fiscal year starts.
  • The union budget is a financial statement and a financial reform platform.
  • The union budget is prepared to help improve the country's economic condition by equal allocation of resources, reduction in poverty and increment in the country's per capita income.

Conclusion:

Key Difference between Interim Budget and Union Budget

The key Difference between Interim Budget and Union Budget is that Interim Budget is proclaimed right before the general elections for a duration of roughly 2 to 4 months, whereas Union Budget is a yearly declared budget by the Central Government introduced in the Parliament.

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FAQs on Difference Between Interim Budget and Union Budget

  • The main dfference between Interim Budget and Union Budget is that the union budget is the annual financial report announced by the Central Government and presented in the Parliament of India, whereas the interim budget is an in-between arrangement presented before the general election

  • An Interim Budget is given by a government proceeding through a transformation period or is in its last year in office ahead of general elections. Traditionally, an present government cannot submit a full Union Budget in the election year.

  • The difference between the Interim Budget and Union Budget in terms of their effectiveness is that the interim budget is for a period of 2-4 months, while the union budget is for the entire fiscal year. The interim budget is released with vote-on-account.

  • No, the union budget and interim budgets are not the same. Both differ concerning the time at which they are implemented for. The interim budget is temporary and is presented with special conditions, whereas the Union budget is presented every year and is mandatory to be presented.

  • The Difference between Interim Budget and Union Budget in terms of when they are presented is that the Union Budget is presented on February 2, whereas the Interim Budget has no specific date. The Interim budget may not be presented at all, but the Union budget is set to be presented at a fixed date and time.

  • The Union Budget is also referred to as the annual budget, which is an estimate of remuneration and expense of the Central Government over a fixed time. Union Budget is for the complete fiscal year and is considered mandatory.

  • The difference between Interim Budget and Union Budget in terms of the time of the announcement is that the Interim Budget is a provisional budget that the Central Government announces before the general election if it feels the need for the same, whereas the union budget is an annual financial budget that is announced every year.

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