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Explainer: What is an interim budget? What FM Jaitley can and cannot do

This will be the last Budget of the current BJP-led NDA government before the 2019 General Elections

BS Web Team  |  New Delhi 

Finance Minister Arun Jaitley
Finance Minister Arun Jaitley

With just a few months left before the government formally completes its tenure, Finance Minister will present NDA regime's first interim budget on February 1, 2019.

As this will be the ruling BJP government’s last budget before the upcoming Lok Sabha elections, here's an explanation of what an interim budget actually means.


An interim budget is presented by a government which is going through a transition period or is in its last year in office ahead of the general elections. Traditionally, an incumbent government cannot present a full-fledged Union Budget in the election year. Instead, the Finance Minister presents an interim budget during the joint sitting of Rajya Sabha and Lok Sabha in the Parliament, the livemint reported.


With an interim budget, the incumbent government seeks a vote of approval from the Parliament to draw money from the Consolidated Fund of India to meet its budget expenses before the end of the financial year, i.e; March 31st, 2019. It is a traditional practice which takes place in the run-up to every general election, according to an India Today report. 

The full-fledged Union Budget is presented by the newly-elected government after Lok Sabha polls. In recent times, interim budgets have been instrumental for the incumbent governments to list out their achievements to draw voters' support.

What can be done?

An interim budget is similar to a Union Budget. In interim-budget, the ruling government tables estimate of its expenditure, revenue, fiscal deficit and financial performance and projections for the upcoming financial year. The ruling government at the end of its tenure, presents an interim budget for three to four months so as to keep the country running unhampered. The likely focus of the incumbent government in the interim budget can be to outline its economic vision for the next five years if it may remain in power, said the livemint article.

As Business Standard earlier said, the Finance Ministry may double the (I-T) exemption threshold for the salaried taxpayers from the present Rs 250,000 to Rs 500,000, which is expected to benefit the middle-class segment of the society.


Contrary to declaring major tax proposals, the ruling government can adopt a few populist measures to please the electorate. The BJP government may introduce an income support scheme for farmers and the poor the agrarian crisis can be a major focus during the budget presentation. 

What cannot be done?

It does not make any major policy announcements during the interim budget which could financially burden the next government which will present the Union budget. According to the Election Commission's Code of Conduct, the ruling government cannot include any major scheme in the interim budget as it could influence the voters. The government in power cannot present the Economic Survey along with the interim budget, only the next government can publish it during June or July, reported a livemint's article. 


As the Goods and Services Tax (GST) Council has already declared a number of changes to the tax slabs, the NDA government has very limited options to exercise in indirect taxes segment.

The Budget Session of the Parliament will be held from January 31 to February 13, which was decided in the meeting of the Cabinet Committee on Parliamentary Affairs (CCPA).

First Published: Wed, January 16 2019. 12:51 IST