E-Paper
The Vote-on-account
A vote-on-account is Parliament's approval to the Centre for withdrawal of money from the Consolidated Fund of India for a specified expenditure to be incurred for a particular period.
The vote-on-account, like the one Government is seeking on January 30-February 5 is Parliament's approval to the Centre for withdrawal of money from the Consolidated Fund of India for a specified expenditure. Its technical term is Appropriation Bill.
As per law, all revenues and loans raised by Government go into Consolidated Fund of India except for anything that is put into a Contingency Fund.
The Bill deals with only expenditure side of the usual budget exercise and not the plan to generate revenue.
Is it part of Budget exercise?
Yes, it is. The Union budget each year is typically presented around the end of February of the previous financial year. However, by the time the budget is normally passed by Parliament, we are well into the financial year to which the budget pertains, which means the Government won't be able to spend any money out of the Consolidated Fund after April 1, when the new year begins, unless it had Parliamentary approval to do so. Thus, the vote-on-account is necessary to cover Govt expenditure for the period between the budget being presented and it being passed.
Vote on account is related to just expenditure side of the Budget while the Budget spells out both the way of expenditure and generation of revenue. The term vote on account, is generally understood by common man to connote an interim budget. But, in fact, when we talk about an interim budget, we normally refer to a statement of accounts that doesn't incorporate changes in taxation rates from prevailing rates.
For example, when Chandra Shekhar Govt was reduced to a caretaker status in early 1991, the then Finance Minister Yashwant Sinha had presented a vote on account and not the full budget.
Reason for a vote-on-account
The reason behind this convention is that it is deemed improper for any outgoing Govt to bring changes which might not agreeable to the new Govt. The reasons all the more valid when interim Budget is presented just before any elections. However, the practice is just a matter of convention and not compulsion. The caretaker govt can, if it wishes, present a full-fledged Budget. The concept of 'caretaker' doesn't exist in Constitution.
Validity period of vote on account?
Under the normal course of events, it's in operation till such time as Budget is passed. But, in any case, this period won't exceed six months as that's the maximum gap possible between two sittings of Parliament.
Vote-on-account this time
Finance Minister Jaswant Singh will make a speech, which can contain his intentions on the economic policy front. He can't announce Government's decisions in the speech but he can surely give enough indications of what he would like to do if returned to Parliament as Finance Minister after polls.
The decade of 1980s saw only one vote-on-account presented by R Venkataraman. Three vote-on-accounts were presented in 1990s, which indicates politically turbulent times.
For example, when Chandra Shekhar Govt was reduced to a caretaker status in early 1991, the then Finance Minister Yashwant Sinha had presented a vote on account and not the full budget.
The Finance Minister Jaswant Singh will present the first vote-on-account of the present decade.
