The Hindu : Vote-on-account: use and misuse

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Wednesday, Feb 04, 2004

Opinion

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Vote-on-account: use and misuse

By Madhu Dandavate

THE CONCEPT of vote-on-account was introduced in the parliamentary process with a definite perspective. The financial year ends on March 31. It is therefore essential that all the stages of the debate on the budget presented to Parliament, including the general discussion, discussion on demands of grants of various Ministries, appropriation bill and finance bill are completed before March 31.

If discussion covering all the stages is not completed by March 31, no financial resources will be available for the expenditure of various Ministries in the next financial year. To prevent such an exigency, by way of abundant caution, a vote-on-account is introduced in Parliament sanctioning roughly one-third of the expenditure projected in the budget. Then, even if the discussion during all the stages of the debate is not completed and it spills over beyond March 31, on the basis of the amounts sanctioned by Parliament through the vote-on-account financial crisis is avoided. The convention is that such a vote-on-account is accepted in Parliament without division.

There is another situation under which vote-on-account becomes inevitable and inescapable; when the Lok Sabha is elected quite close to March 31, with hardly a few days left for the presentation and discussion of a full-fledged budget. Vote-on-account, popularly known as "interim budget," then becomes unavoidable.

However, there are occasions when the device of vote-on-account is misused. Our parliamentary record shows that on one occasion, the Finance Minister had already prepared a full-fledged budget. It was construed that in the compelling situation, the budget would be a "hard" one with heavy burdens thrown on consumers, taxpayers and different sections of the population. But prior to the budget, President's rule was promulgated in one State and the Assembly was dissolved. It was feared that the results of the Assembly elections in that State would be adversely affected by a "hard" Union budget, which had already been formulated. As a result, the Union budget was kept in cold storage and instead, vote-on-account was introduced in Parliament. This was clearly a misuse of the device.

There has been a time-honoured convention about changing the tax and duty structures on the eve of presentation of the budget. On one occasion, the Finance Minister had changed custom duties on several commodities by laying on the table of both the Houses of Parliament 182 notifications for a week prior to the presentation of the budget. I had then raised a privilege issue in the Lok Sabha against the Finance Minister on the ground that it was not proper to lay on the table of the House notifications about change of custom duties, when hardly a week was left for the presentation of the budget. The then Speaker of the Lok Sabha took a technical view and ruled that the Customs Act allowed such custom duty changes to be introduced through notifications laid on the table of both the Houses of Parliament. However, when a similar privilege issue was raised in the Rajya Sabha, the Chairman of the Upper House ruled that despite the fact that the Customs Act allowed changed in customs duties through notifications laid on the table of the House, propriety demanded that this should not be done on the eve of presentation of the budget.

The present National Democratic Alliance Government, after recommending the dissolution of the Lok Sabha to the President of India, has gone in for a vote-on-account. There was a grave impropriety on its part in granting a series of concessions and tax reliefs on the eve of the vote-on-account. Since a vote-on-account does not allow duty and tax structures, the best course of action on the part of the Government would have been not to make announcements about various financial sops but to wait for a full-fledged budget before recommending the dissolution of the Lok Sabha. The obvious intention of the NDA Government was to gain some mileage on the eve of the next general election.

However, if one carefully analyses the financial proposals before the present vote-on-account, regarding rich families and upper middle classes, disinvestments, corporate educational facilities, foreign investments and NRIs (non-resident Indians) etc., one can easily see that almost none of these sops will touch even a fringe of 80 per cent of India's population.

The so called `feel good' sops offered prior to the vote-on-account will not satisfy the needs of vast sections of India's population. The inability of the Finance Minister to cater to the aspirations of vast sections of the population is hidden behind the veil of the limited scope of the vote-on-account. People are told, vote-on-account is only a constitutional ritual. To the poor and the neglected, the message transmitted is: "wait for the next full-fledged budget and for that return us to power again to enhance the `feel good effect.' "

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Vote-on-account: use and misuse