Full Budget vs Interim Budget: There is immense confusion regarding the interim budget and full budget among people. So, what is the basic difference between the two? Let's decode here! The current government announces interim budget during the last year of its tenure before elections. The new government will, however, announce a full budget after taking charge. As it is not practical for the current government or for the upcoming government to take charge right after the elections to prepare or debate on the full budget and also pass it before the new financial year starts. Hence, the outgoing government announces an interim budget or vote on account in February, followed by a full budget by the new government.

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Here is the detailed explanation for both the terms:

What is an annual or full budget?

An annual budget is announced in two parts. The part one is the detailed structure of income and expenses prepared by the government in the previous year. Part two is the announcement of future ways to raise funds from taxes and how will it spend them on development in the country in important areas.

What does interim budget mean?

The interim budget is a summary of the income and expenses held last year and the future expenses expected to be held in the next few months until the new government takes charge. However, there is nothing announced on the sources of income in the budget through tax collections. The process is known as a vote on account, it seeks the nod of the Parliament. After the approval of parliament, the money for the expenses is then given to the Consolidated Fund of India.  

It is practically difficult for the new government in an election year to take charge and prepare the full budget/pass it prior to the upcoming fiscal year begins. Hence, the leaving government announces an interim budget or vote on account in February, followed by a full budget by the new government.