As February 1 approaches, discussions about the upcoming budget intensify across the nation. Each year, on this date, the Finance Minister of the central government presents the country’s budget. In the election year, Finance Minister Nirmala Sitharaman is set to unveil an interim budget rather than the complete budget.
Let’s delve into the meaning of the term “budget” and the intriguing story behind its nomenclature.
Etymology of “Budget”
The word “budget” traces its roots to the French term “bouge,” meaning a small bag. The connection between a small bag and the budget has a captivating history, dating back to 1733 in England.
England’s budgetary origin
In 1733, Sir Robert Walpole, the former Finance Minister of England, presented budget proposals in a small bag to Parliament. When questioned about its contents, he famously replied, “It contains the budget for your necessities.” Since then, the term “budget” has become widely adopted.
Absence of “Budget” in Indian Constitution
Surprisingly, the term “budget” is conspicuously absent in the Indian Constitution. Article 112 refers to it as the “annual financial statement,” where the government outlines its estimated expenses and anticipated revenues for the fiscal year.
Vote on account approach
Finance Minister Nirmala Sitharaman recently announced the introduction of a “Vote on Account” budget for the current fiscal year. According to Article 116 of the Indian Constitution, a vote on account or an interim budget allows the government to draw funds from the accumulated treasury to meet short-term expenditures until the commencement of the new financial year.
Understanding the consolidated fund of India
Article 266 sheds light on the Consolidated Fund of India, where all government revenues, including taxes, loan interest, and state taxes, are stored. It acts as the repository of the central government’s income, and its utilisation is strictly regulated during the annual budget.
Limitations on consolidated fund usage
The Consolidated Fund of India comes with strict limitations during the presentation of the Central Budget. Funds can only be allocated for government expenses, and revealing income details is prohibited.
Intricacies of “vote on account”
Exploring further, a vote on account primarily serves the purpose of addressing urgent needs and essential expenditures before the commencement of the new financial year. Finance Minister Sitharaman’s decision to opt for a vote on account in Budget 2024 reflects the unique financial approach adopted during election years.
Budget 2024 not only unfolds the fiscal plans for the nation but also carries a rich history and intricate financial mechanisms. From its etymological roots to the nuances of budgetary procedures in the Indian context, this budget season offers more than just numbers—it unveils a story of financial evolution.
Also read | Budget 2024: When will the full-fledged budget be presented this year?