Union Finance Minister P Chidambaram is presenting UPA-II's interim Budget on Monday. Here's a description of what an interim budget or vote-on-account is.

A national interim Budget refers to the budget of a government that is going through a transition period. These budgets are common in democracies where one political party or a coalition is voted out and another political party or a coalition is voted into office. The two governments often have different fiscal plans, so the old government budget is cut short and a new budget is created.

The interim Budget helps span the transition time between the two governments so that the government can continue to function. Countries like India use the term interim Budget specifically to describe this period. A national interim Budget is created out of necessity. National governments require interim budgets to function in the months it takes for a new government to create its own budget plan

A vote-on-account presents an estimate of expenditures to be sanctioned by the exchequer till the Budget is passd.

The Budget announces new programmes and estimates the public expenditure for the fiscal year.

A vote-on-account cannot alter direct taxes since they need to be passed through a finance bill.

In the Budget, fresh taxes may be imposed, old ones may go. Direct taxes like income tax and indirect taxes are both open to change

The common feature is that both include the previous year's financial performance of the government.

The significance:

The government cannot present a full budget because in such a short session, there's no time to debate proposals in Parliament.

Expenditure for new schemes will have to form part of the new budget, which can be approved only after April 1.

Also, it is ideally the new government's prerogative to decide how it'll raise and spend money.

The newly formed government cannot be burdened by the previous government's budgetary allocations.

While these are the technicalities, many look upon the vote on account as election rhetoric. Many look at it as a window where the government highlights its achievements ahead of elections. Experts say voters reward you for what you did in the first four years rather than what you did in the last six months.

Whether or not the government succeeds in wooing the voter, the fact is that India is battling an economic meltdown like 2009. The government will have to take steps to reboot the economy. What remains to be seen though is whether these steps will be a part of the vote-on-account. (IBN Live)