The Election Commission allowed the Centre to present the Union Budget on February 1 ahead of the Assembly polls.
But the EC said that the schemes related to the poll-bound states cannot be announced.
It added that the Finance Minister’s speech should not refer to the government’s achievements in these states.
It also reminded the government of a 2009 advisory which said vote-on-account instead of a full-fledged budget is presented ahead of elections as per convention.
In an election year, like it was in 2009, the Government would instead present a vote on account (VOA) or an interim budget.
What is a vote-on-account?
VOA literally means a vote on the accounts of the government.
During parliamentary elections years, till a new government takes over, the caretaker government needs funds for various routine items of expenditure like staff salaries.
According to the Constitution, the government cannot spend any money without Parliament's approval.
Hence, VOA is taken whereby a government gets parliamentary approval to run the government for a few months.
What are the restrictions on a VOA?
Typically, no changes are made to tax and duty structures and no new schemes are announced in vote-on-account.
However it can extend coverage or allocate more money to an existing scheme.
Why VOA is used?
Constitutionally, there is no distinction between a caretaker government and a regular one.
The government could technically present a full budget.
However, by convention, a government that is at the end of its tenure opts for a vote-on-account since it is regarded as improper that an outgoing government should impose its policies on its successor.
Also in election years a full budget would tempt governments to resort to populism and may spend rampantly.
Interim budgets have also been used by governments taking office just before the financial year begins to get Parliamentary approval for immediate spending.
How is a VOA different from interim budget?
VOA and interim budget are often interchangeably used.
VOA generally deals only with the expenditure side of the government's budget, whereas an interim budget includes both expenditure and receipts.
Generally, a VOA is for two or three months, usually till the time it is replaced by a regular budget.
