What is Vote on Account Budget ? - Union Budget 2024-25 Highlights

On 1st February, 2024, India presented its Interim Budget (which is almost same as Vote-On-Account). Finance Minister Nirmala Sitharaman became the second finance minister to present the budget for sixth (“6”) time (five Annual budget and one interim budget) after Former Prime Minister Morarji Desai. FM announced, in December 2023, that the upcoming budget will be a vote-on-account and there will be “no spectacular announcement” as the Government “will be in election mode”. As the Elections are just few months away the FM said these statements in December, 2023.

In 2019, Piyush Goyal who held the Additional Charge of Finance Ministry presented the last interim budget. Annual Budget is expected to be delivered by the newly formed Government in July, 2024.

What is Vote-on-Account Budget and Interim Budget?

Since, an incumbent Government cannot present a full Union Budget during an election year, a budget presented or tabled in the parliament during that year before the election is known as interim budget. 

According to Article 116 of the Indian constitution, Vote-on-Account is to make any grant in advance in respect of the estimated expenditure for a part of any financial year.

To put in simple, the outgoing government seeks interim permission from the parliament to withdraw funds from the consolidated fund of India for few months before the new government is formed after the elections.

Vote-on-Account vs Interim Budget

The main difference between Interim budget and Vote-on-account budget is while the interim budget talks both about revenue and expenditure; the vote-on-account speaks only about expenditure during the period. Another major difference is Interim budget may be valid for full fiscal year whereas Vote-on-Account budget is valid only till new government forms – mostly three to four months period.

From the FM’s speech/ statement the present budget falls under the category of Vote-on-Account. Now let us look into major Highlights of Union Budget 2024-25.

Major Highlights of Union Budget 2024-25

This budget’s main focus is GYAN which is defined as “Garib” (Poor), “Mahilayen” (Women), “Yuva” (Youth), and “Annadata” (Farmer).

‘Garib Kalyan, Desh ka Kalyan’ – Schemes for Poor

  • ‘Sabka ka Saath’ in these 10 years, the Government has assisted 25 crore people out of multi-dimensional poverty.
  • Direct Benefit Transfer (DBT) of Rs. 34 lakh crore using PM-Jan Dhan accounts led to savings of Rs. 2.7 lakh crore for the Government.
  • Under PM-SVANidhi credit assistance was provided to 78 lakh street vendors. From that 2.3 lakh have received credit for the third time.

Empowering Youth

  • 4 Crore Youth has been trained under Skill India Mission and 54 Lakh Youth have been reskilled.
  • 3000 New ITIs have been established
  • 7 IITs, 16 IIITs, 7 IIMs, 15 AIIMS and 390 universities have been set up.
  • Fostering entrepreneurial aspirations of Youth 43 crore loans have been sanctioned under PM Mudra Yojana. Aggregating to Rs. 22.5 Lakh crores.
  • Besides that, Fund of Funds, Start Up India, and Start Up Credit Guarantee schemes are assisting our youth.

Welfare of ‘Annadata’

  • Direct financial assistance to 11.8 crore farmers provided under PM-KISAN SAMMAN Yojana.
  • Under PM Fasal Bima Yojana (Crop Insurance Scheme) – a crop insurance is given to 4 crore farmers.
  • Under Electronic National Agriculture Market (e-NAM) integrated 1361 mandis, providing services to 1.8 crore farmers with trading volume of Rs. 3 lakh crore.

Momentum for Nari Shakti

  • Under Mudra Yojana, 30 crore loans were provided to women entrepreneurs.
  • In past 10 years, the Female enrolment in higher education gone up by 28%.
  • In STEM courses, girls and women constitute 43% of enrolment, one of the highest in the world.
  • Over 70% houses under PM Awas Yojana given to women from rural areas.
  • 1 crore women assisted by 83 lakh SHGs to become Lakhpati Didis

PM Awas Yojana (Grameen)

  • In next Five Years, Two crore more houses will be taken up.

Rooftop solarization and muft bijli

  • Through rooftop Solarisation, 1 crore households to obtain 300 units free electricity every month.
  • This is expected to save Rs.15000 to Rs.18000 annually for each household.

Agriculture and food processing

  • Pradhan Mantri Kisan Sampada Yojana has benefitted 38 lakh farmers and generated 10 lakh employment.
  • Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has assisted 2.4 lakh SHGs and 60,000 thousand individuals with credit linkages.

Research and Innovation for catalyzing growth, employment and development

  • A corpus of Rs.1 lakh crore to be established with fifty-year interest free loan to provide long-term financing or refinancing with long tenors and low or nil interest rates.
  • A new scheme to be launched for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta’.

Infrastructure

  • Capital expenditure outlay for Infrastructure development and employment generation to be increased by 11.1 per cent to Rs.11,11,111 crore, that will be 3.4 per cent of the GDP.

Investments

  • FDI inflow during 2014-23 of USD 596 billion was twice of the inflow during 2005-14.

Reforms in the States for ‘Viksit Bharat’

  • A provision of Rs.75,000 crore rupees as 50-year interest free loan is proposed to support milestone-linked reforms by the State Governments.

Revised Estimates (RE) 2023-24

  • RE of the total receipts other than borrowings is Rs.27.56 lakh crore, of which the tax receipts are Rs.23.24 lakh crore.
  • RE of the total expenditure is Rs.44.90 lakh crore.
  • Revenue receipts at Rs.30.03 lakh crore are expected to be higher than the Budget Estimate, reflecting strong growth momentum and formalization in the economy.
  • RE of the fiscal deficit is 5.8 per cent of GDP for 2023-24.

Budget Estimates 2024-25

  • Total receipts other than borrowings and the total expenditure are estimated at Rs.30.80 and Rs.47.66 lakh crore respectively.
  • Tax receipts are estimated at Rs.26.02 lakh crore.
  • Scheme of fifty-year interest free loan for capital expenditure to states to be continued this year with total outlay of Rs.1.3 lakh crore.
  • Fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP
  • Gross and net market borrowings through dated securities during 2024-25 are estimated at Rs.14.13 and Rs.11.75 lakh crore respectively.

Economy-then and now

  • In 2014 there was a responsibility to mend the economy and put governance systems in order. The need of the hour was to:
  • Attract investments
  • Build support to the much-needed reforms
  • Give hope to the people
  • The government succeeded with a strong belief of ‘nation-first’
  • “It is now appropriate to look at where we were till 2014 and where we are now”: FM
  • The Government will lay a White Paper on the table of the house.

Sources: Budget Speech and Budget Highlights by PIB

These are the major highlights of the Union Budget 2024-25.

My Perspective/ Conclusion

There are much more in terms of Budget like taxation, Sectors, Green energy etc… However, only major highlights are mentioned here. As this is only Vote-on-Account Budget there is not much to discuss about it. Full Union budget is expected to be tabled in parliament in July.