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Vote on Account is meant for
1. Vote on the report of CAG
2. To meet unforeseen expenditure
3. Appropriating funds pending the passing of the budget
4. Budget
5. None of the above/More than one of the above

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Correct Answer - Option 3 : Appropriating funds pending the passing of the budget

The correct answer is Appropriating funds pending the passing of the budget.

  • Vote on Account:
    • A vote on account is the process by which an incumbent government obtains votes from Parliament to draw money from the Consolidated Fund of India to meet its expenses until the elections are done.
    • As per the Constitution, all the revenue received by the Union government and the loans raised by it is parked in the Consolidated Fund of India.
    • In the run-up to every general election, Parliament votes to sanction the withdrawal of money from this fund to meet regular government expenses such as payment of salaries and interest.
    • Vote-on-account is a temporary measure, it does need the approval of Parliament and it is usually passed without much discussion.
    • It is usually valid for two months until the new government presents a full Budget.
    • Ministries and departments can utilize the funds available for non-Plan expenditure which includes payments of salary to government employees, loan interest payments, subsidies, pension payments, based on the vote on account.

  • Use of Vote of Account:
    • Vote-on-account is a temporary measure, it does need the approval of Parliament and it is usually passed without much discussion.
    • It is usually valid for two months until the new government presents a full Budget.
    • Ministries and departments can utilize the funds available for non-Plan expenditure which includes payments of salary to government employees, loan interest payments, subsidies, pension payments, based on the vote on account.
    • The vote on account typically does not seek funds for major projects or new initiatives, this usually awaits the presentation of the full Budget.
  • Impact on Economy:
    • One of the key features of a vote on account is that it usually does not contain any direct tax proposals, as that requires amendments to the Finance Bill.
    • Therefore, any decrease/increase or exemption/inclusion related to income tax will be on hold if there’s a vote on account.
    • On indirect taxes though, there could be clarifications or minor tweaks.
    • A vote on the account could be used as an opportunity to highlight the achievements of the government during its years in office.
    • This may help understand the effectiveness of the government and make up citizens mind for voting.
    • Apart from this, the country may lose crucial time on developmental projects during the hiatus after the vote on account.

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