Explainer: What is an interim budget? What FM Jaitley can and cannot do

This will be the last Budget of the current BJP-led NDA government before the 2019 General Elections.

Interim Budget 2019: With just a few months left before the Narendra Modi government formally completes its tenure, Finance Minister Arun Jaitley will present NDA regime's first interim budget on February 1, 2019.

As this will be the ruling BJP government’s last budget before the upcoming Lok Sabha elections, here's an explanation of what an interim budget actually means.

What is an interim budget?

An interim budget is presented by a government which is going through a transition period or is in its last year in office ahead of the general elections. Traditionally, an incumbent government cannot present a full-fledged Union Budget in the election year. Instead, the Finance Minister presents an interim budget during the joint sitting of Rajya Sabha and Lok Sabha in the Parliament, the livemint reported.

With an interim budget, the incumbent government seeks a vote of approval from the Parliament to draw money from the Consolidated Fund of India to meet its budget expenses before the end of the financial year, i.e; March 31st, 2019. It is a traditional practice which takes place in the run-up to every general election, according to an India Today report.

The full-fledged Union Budget is presented by the newly-elected government after Lok Sabha polls. In recent times, interim budgets have been instrumental for the incumbent governments to list out their achievements to draw voters' support.

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Budget 2019: FinMin starts 'Know Your Budget' series to educate people on Twitter

The 'Know Your Budget' series, which explains the importance of Union Budget and its making, would continue for about a fortnight.

Interim Budget 2019: Seeking to educate general public about the budgetary process, the finance ministry Tuesday started a series on Twitter providing definitions of various terms used in the budget.

The 'Know Your Budget' series, which explains the importance of Union Budget and its making, would continue for about a fortnight.

The government on February 1 would unveil the interim Budget for 2019-20 as the general elections are due in the next couple of months. The Union Budget 2019 for the next fiscal would be presented by the new government.

The series which began on the ministry's Twitter handle on Tuesday explained what is Union Budget and Vote on Account.

The Budget, the ministry explains, "is the most comprehensive report of the government's finances in which revenues from all sources and outlays for all activities are consolidated.

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To bridge fiscal deficit, RBI likely to pay govt $5.8 bn interim dividend

The dividend could help Prime Minister Narendra Modi's administration bridge a widening budget deficit following a drop in tax collections.

Interim Budget 2019: The Reserve Bank of India (RBI), having changed management last month following a clash with the government, is likely to transfer an interim dividend of Rs 300-400 billion ($4.32 billion-$5.8 billion) to the government by March, according to three sources with direct knowledge of the matter.

The dividend could help Prime Minister Narendra Modi's administration bridge a widening budget deficit following a drop in tax collections, and would come after the government pushed the RBI for the additional funds ahead of a national election due by May.

Former finance ministry official Shaktikanta Das was appointed as the new governor of the Reserve Bank of India (RBI), following resignation of Urjit Patel last month amid tensions over the dividend payout and other issues.

The government and RBI have now appointed a panel to look into the issue around the sharing of the RBI's reserves.

"We are absolutely sure that an interim dividend of more than 300 billion rupees would be paid before March end," one of the sources told Reuters.

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