VOA Likely to Offer Some Relief for the Masses - The New Indian Express

VOA Likely to Offer Some Relief for the Masses

Published: 15th February 2014 06:00 AM

Last Updated: 15th February 2014 01:40 AM

As ruling UPA’s term nears its final leg the government will present what is called a vote-on-account (VOA) instead of a full Budget on February 17. The VOA will ensure that the government has enough funds to run the administration of the country until a new government occupies the office.

Since the VOA deals only with the expenditure side, the government provides an estimate of funds that would be necessary for the first three months or till the poll process is over.

The present government will have to obtain the sanction of Parliament for an amount sufficient to meet the expenditure on various items for a part of the year. This approval by Parliament to withdraw money from the Consolidated Fund of India is known as Vote-on-Account.

VOA is different from a Budget as the latter deals with the complete set of accounts including both expenditure and receipts. In a VOA the government cannot alter the existing the tax rates neither can it announce any populist schemes.

“Though the government is conventionally not expected to announce any populist schemes, it can do so in some form or the other and announce some relief for the masses to appease them ,” a finance ministry official said requesting anonymity.

“This could be in the form of withdrawing the 10 per cent surcharge levied in the last Budget on those earning above `1 crore per annum, or it can bring down import duty on gold that it had hiked to control the current account deficit,” the official added.

A VOA is different from an interim Budget as the former is a statement of only expenditure while the latter is a complete set of accounts, including both expenditure and receipts.

However, a vote-on-account is practised every budget. Unlike a full Budget, the VOA does not tweak the prevailing tax rates. Also in VOA, the  government cannot announce any new schemes.

VOA is normally valid for two months and is in operation till the full Budget is passed. But during an election year, it can be extended for more than two months.

In an election year, the Budget could be presented twice—first to secure a vote-on-account for a few months and later in full.

From Around the Web