FAQs on Interim Budget 2019-2020

  • Nirav Karkera
  • Feb 01 2019
  • 6 minutes
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Published on Feb 1, 2019

Here are the answers to a few Frequently Asked Questions on the upcoming Interim Budget!
Addressing the following questions:-
1)What is an interim budget?
2)What is the difference between an interim budget and a vote on account?
3)When is an interim budget applicable?
4)How is interim budget different from the final budget?
5)Does interim budget 2019 hold any value?
For more queries on interim dividend drop your comments on the comment section below.

Speaker Info: Nirav Karkera is the Head of Research at Finity. He is known to look beyond just numbers and identify wealth-creation opportunities in the Indian capital markets. A former U.S. Oil & Gas, Chemicals credit analyst with a globally-renowned credit rating agency, he has a penchant for translating dynamic economics into wealth propositions. Nirav specialises in generating risk-optimal wealth for investors through strategic as well as tactical play with equity and fixed income assets. He is up, anytime, for an intellectual debate around anything that pertains to business, economics & wealth.

He can be reached at nirav@finity.in

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TRANSCRIPT:

Hi guys! So as the interim budget is closing by we have received a few queries and questions around the budget itself so we decided why not in the best interest of everyone share the same questions and our responses to it with all of you viewers out there

1. What is an interim budget?

Interim budget is the name itself suggests its the budget presented in an interim fashion it is not an actual full-fledged budget it is something being presented as a temporary solution, so this generally done during the time of the year where there is a general election close by like it is now, so our interim budget is not really a full-fledged budget but a mini version of it, it is generally. Anything presented in the interim budget cannot really be implemented for the whole next year, there will be a full-fledged budget presented by the next elected government.

2. What is the difference between an interim budget and a vote on account?                                                                                                               

 An Interim budget would be talking a lot about past expenses and past revenues, also the future expenses and revenues that the government expects at least for the next couple of months till the general Lok Sabha elections are conducted. A vote on account, on the other hand, has the first part intact it will talk about the past revenue and expenses but at the same time it will also focus majorly around the expenses that the government would be making and not so much around the sources of income or the revenues.

So that is the difference between in an interim budget and a vote on account so government generally during election years can choose to present one of these this year the finance ministry explicitly mentioned that it would be presenting an interim budget.

3. When is an interim budget applicable?

As I mentioned it is applicable when a government does not really have a full tenure to implement a budget like now majorly because of an upcoming election, like this year in 2019. So an interim budget is basically the budget which is in play and in force till the next government is elected.

4. How is interim budget different from the final budget?         

Final budget- it consists of a lot more than an interim budget, it talks about the past and the future years revenue and expense in detail.

However an Interim budget  due to the lack of a period in future it cannot really talk much about the sources of revenue in future, neither about the expenses that it expects to, the current government expects to incur over an entire year so it is somewhat an apprised version of a full budget, generally a full budget can include several important measures like certain tax changes, policy changes while the interim budget can also introduce a few policy changes, the election commission of India has certain guidelines to ensure that the interim budget is not presented in a way that unfairly influences the voting section of the society, so that is the basic difference between an interim and a full budget.

5. Does interim budget 2019 hold any value?                                       

This is quite a question that demands some opinion on a personal and subjective front, in our opinion all budgets do hold value and the interim budget would actually be indicative of what the current government is willing to do, having said it is not necessary that it does everything that it mentions in the interim budget but it actually explains the mindset and the framework with which the current government expects to run the economy if re-elected so that offers some more insight and perspective and apart from that, while it does not hold any significant value for the longer term it does have a deep impact on the sentimental and emotional fronts on the Indian population so ya by that measure it does have a certain degree of importance.

So these were the top 5 questions that came to us, if you have any more questions related to the budget, we would be more than happy to answer them, just drop your questions in the comment section and we will answer each one of them, so meanwhile keep watching this space once the interim budget is out we actually hope to come out with another video explaining of what we understood of the interim budget and how we expect it to impact the country, the economy, and your personal investments.
So meanwhile keep browsing through the Finity app for investment opportunities that would turn to gold irrespective of what this budget presents.
Happy Investing guys!

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