As the nation grapples with pandemic to recover from an economic slowdown, the Union Budget of India 2021 is scheduled to be presented by Union Finance Minister Nirmala Sitharaman during the fifth Parliamentary session, on February 1.
The Budget for FY22 will come on the backdrop of an estimated economic contraction of 7.7 per cent, the first time in the history of independent India. Hence, all stakeholders have great expectation from the upcoming Budget, which could provide a healing touch to the pandemic-battered economy and push growth.
Even Finance Minister Nirmala Sitharaman last month promised a "never before" like Union Budget to the people of India.
With all eyes set on the Union Budget 2021, it is imperative for people to know the key terms associated with the annual exercise. One such term is 'vote on account'.
What is vote on account?
A vote on account, as defined by Article 116 of the Indian Constitution, is a grant in advance for the central government to meet short-term expenditure needs from the Consolidated Fund of India, generally lasting for a few months till the new financial year kicks in.
Article 266 of the Indian Constitution defines the Consolidated Fund of India, which is where all the revenue of the central government, be it from taxes, funds raised by loans and interest on loans, and a portion of taxes from states, is parked.
It states that no money from the Consolidated Fund may be withdrawn except under an appropriation undertaken by law, for which the Centre passes an appropriation bill during the Union Budget.
However, appropriation bills tend to require time to pass in the Parliament and become law, and to alleviate any problems rising from such a situation as the Centre requires permission to withdraw any sum of money from the CFI from the beginning of a new financial year, a vote on account is passed.
Typically, a vote on account is treated as a formality and passed with no discussion on the matter. It is also used during the final year of the elected government to pass a short-term expense bill to keep things running till the new government can ratify a full Budget. It is usually laid out for two months and foregoes allocation of funds for major projects, being allocated for salaries, interest on loans, subsidies and so forth instead.