Budget & EC Code of Conduct: A Comprehensive Guide to Understand Budget in Election Year

11 Jan 2024 , 03:09 PM

Finance Minister Nirmala Sitharaman has indicated that the upcoming interim Budget, scheduled for presentation on February 1, 2024, is unlikely to feature significant announcements. This will be her sixth budget presentation, comprising five comprehensive budgets and one interim budget. As the general election is approaching in the following year, the interim budget holds importance for obtaining parliamentary approval for expenditures beyond March 31.

The Minister clarified that the Budget scheduled for February 1, 2024, will primarily be a vote-on-account, given the current election mode.

Traditionally, successive governments have adhered to the practice of avoiding substantial policy announcements before elections. This custom persists even in situations where the election schedule is undisclosed, and the code of conduct has not been enforced.

The Election Commission of India’s code of conduct provides standards for the inclusion of key initiatives in the interim budget, which can influence voter decisions.

During the general election year, the government normally delivers the economic survey alongside the whole annual financial statement, which takes place around June-July after the new administration is sworn in.

The interim budget has recently been a vital tool for governments during general elections, serving as a method of communicating the governing party’s economic strategy.

However, exceptions to this common norm have happened. Piyush Goyal, who took on extra responsibilities in the Finance Ministry, delivered an interim budget ahead of the 2019 general elections. During this announcement, he proposed a monetary transfer of Rs 6,000 per year to 12 crore farmers.

Some other restrictions:

Even if a budget allocation has been made for a certain programme or it has been previously sanctioned, the announcement or inauguration of such a scheme is banned during election season. This prohibition is in place to maintain fairness and prevent the exploitation of government resources for electoral purposes.

In order to handle emergencies or unexpected disasters, such as offering assistance to those impacted by droughts, floods, diseases, or other natural calamities, as well as implementing welfare programs for the elderly and infirm, the government can undertake these initiatives with prior approval from the Election Commission.

To ensure the integrity of the electoral process, ministers and other authorities are barred from authorizing grants or payments from discretionary funds after elections have been announced.

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