VOTE ON ACCOUNT

VOTE ON ACCOUNT

Subject : Polity

Context : Bengal Chief Minister Mamata Banerjee on Friday announced a number of schemes and sops, including a hike in the annual aid of farmers. She presented a vote-on-account for Rs 2.99 lakh crore in the Assembly.

Concept :

Vote on Account

• A vote on account is the process by which an incumbent government obtains votes from Legislature to draw money from the Consolidated Fund to meet its expenses until the elections are done.
• In the run-up to every general election, Legislature  votes to sanction the withdrawal of money from this fund to meet regular government expenses such as payment of salaries and interest.

How vote on accounts differs from the usual budget?

• Budget is nothing but a projected income and expenditure statement from the Central government for the coming year.
• Usually, the Budget has to be approved by Legislature before the commencement of the new financial year.
• Over the years though, Indian Budgets have become major events, doubling up as major policy statements of the government.
• But in the years where assembly elections are due, it would be improper for the outgoing government to impose policy changes or budgetary constraints on its successor who may or may not accept them.
• However, it is still necessary to keep enough money at its disposal to allow it to run the administration, requiring a vote on account.

How vote on account works?

• Vote-on-account is a temporary measure, it does need the approval of Legislature and it is usually passed without much discussion.
• It is usually valid for two months until the new government presents a full Budget.
• Ministries and departments can utilize the funds available for non-Plan expenditure which includes payments of salary to government employees, loan interest payments, subsidies, pension payments, based on the vote on account.
• The vote on account typically does not seek funds for major projects or new initiatives, this usually awaits the presentation of the full Budget.
• The new government elected may have different ideas in mind for the allocation of resources.
• Therefore, the incumbent government usually restrains itself from making any new financial commitments.