New Delhi: Finance Minister Nirmala Sitharaman on Thursday presented an interim Budget for the new fiscal, FY25. The full Budget for the mentioned fiscal will be introduced in July, after a new government is formed following the upcoming general elections in the first half of 2024.
What is Interim Budget?
It is presented by a government that is going through a transition period or is in its last year in office ahead of general elections. Traditionally, an incumbent government cannot present a full Union Budget in the election year.
With an Interim Budget, the incumbent government seeks a vote of approval from Parliament to draw money from the Consolidated Fund of India to meet its Budget expenses before the end of the financial year. It is a traditional practice which takes place in the run-up to every general election.
An interim budget usually covers the immediate financial needs and allocations for the next few months until the new government can present a complete budget for the entire fiscal year.
Generally, incumbent government do not introduce major policy changes in the Interim Budget. However, they may include some policy adjustments and new initiatives if there is an urgent need or if they are in line with the ongoing government's priorities.
The Interim Budget 2024 was focused on youth and women empowerment, while maintaining fiscal consolidation and continuing capex. FM Sitharaman lowered down FY25 fiscal deficit target to 5.1% of the GDP. There were no changes made to the direct tax and indirect tax rates.