A Change in Tradition
In the past, there were set practices for presenting the Union Budget, but change is inevitable. The tradition of announcing the budget at the end of February, a practice dating back to colonial times, saw a significant shift in 2017 under the leadership of Prime Minister Narendra Modi’s NDA government.
Why the Date Changed
Former Union Finance Minister Arun Jaitley explained that the shift from the final working day of February to February 1 aimed to break away from the 92-year-old colonial-era practice. The change allowed the government more time to prepare for new policies and adjustments set to take effect from April 1.
Integration and Streamlining
In a noteworthy move, Jaitley also did away with the tradition of presenting a separate Railway Budget, a practice inherited from British rule. Instead, he integrated the Railways Budget with the Union Budget, streamlining the budgetary process.
Evolving Time of Budget Presentation
The timing of the budget presentation has also evolved over the years. Until 1999, the budget was presented at 5 pm on the final day of February. However, Yashwant Sinha, the Finance Minister in the Atal Bihari Vajpayee-led NDA government, shifted it to 11 am for a more comprehensive analysis of the numbers. Since then, the Union Budget has been presented at 11 am every year.
Interim Budget and the 2024 Budget Scenario
The upcoming budget 2024 is on February 1 is an interim one for the fiscal year 2024-25. It won’t feature major announcements but will serve as a placeholder until the conclusion of the 2024 Lok Sabha elections and the formation of a new government.
Interim Budget vs. Vote-on-Account
An interim budget, similar to a full budget, undergoes deliberation and approval in the Lok Sabha. However, in the case of a vote-on-account, it is passed without extensive discussion. While an Interim Budget can propose changes in the tax system, a vote-on-account is unable to modify the tax regime due to the Election Commission of India’s code of conduct, restricting the outgoing government from implementing significant tax and economy-related measures to avoid influencing voters.