Definition
Interim Budget
An interim budget is a stop-gap budget presented before a general election to manage finances until the incoming government presents a full Budget.
In an election year, the outgoing government presents an interim budget rather than a full one, by convention avoiding major new policy announcements so as not to bind the next administration. It typically pairs estimates of receipts and expenditure with a vote on account for the early months.
While legally the government can introduce tax changes in an interim budget, the established practice is restraint. After the election, the new government presents a full Budget with its own taxation and spending choices for the remainder of the year.
Related terms
- Vote on AccountA vote on account is Parliament's approval for the government to draw money for essential expenditure for a few months until the full Budget is passed.
- Finance BillThe Finance Bill is the legislation introduced with the Budget that gives legal effect to the government's tax proposals for the coming year.
- Appropriation BillThe Appropriation Bill is the law that authorises the government to withdraw money from the Consolidated Fund of India to meet the expenditure approved in the Budget.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.