With reference to the Interim Budget, consider the following statements:
1. Interim Budgets are usually presented in an election year either just before the general elections or immediately after them
2. Interim Budget is generally required when general elections are scheduled in the first quarter of the financial year
Which among the above statements is / are correct?

Answer: [C] Both 1 & 2

Interim Budgets are usually presented in an election year either just before the general polls or immediately after them. A government that is about to complete its five-year term and has already presented five full Budgets is required to come up with an interim Budget. This allows the government to draw funds from the exchequer and keep its administration and finances running for a period of about four months before which elections can be held and a new elected government is put in place with enough time for it to present a full Budget for the year. An interim Budget becomes necessary also when a new government is formed but does not have enough time to present a full Budget before the end of the financial year beyond which it has no power to draw money from the Consolidated Fund of India. The need for an interim Budget, arises largely out of the timing of the general elections. If the elections are held sometime in the middle or the latter half of a financial year, interim Budgets are not required. Only when general elections are scheduled in the first quarter of the financial year, the government has no option other than an interim Budget.

This question is a part of GKToday's Integrated IAS General Studies Module