Govt. desires fiscal year to be same as calendar year
Government is deliberating on a possible change in financial year to January-December from April-March at present and a decision would be taken after a “cost-benefit” analysis, a top finance ministry official said today.
Prime Minister Narendra Modi had in the NITI Aayog Governing Council meet earlier in the week urged the states to take initiative to shift to a new fiscal year.
A top finance ministry official said that advancing the Budget presentation had its benefits, and the benefits of a change in fiscal year has to be weighed against its cons.
“The government is deliberating on the possibility of change in fiscal year. We will do a cost-benefit analysis of shifting to January-December and will take a decision,” the official said.
Breaking the age-old tradition, the government had advanced presentation of General Budget by a month to February 1 with effect from this year.
Addressing the states Modi had said: “In a country where agricultural income is exceedingly important, budgets should be prepared immediately after the receipt of agricultural incomes for the year”. He said there have been suggestions to shift the financial year from January to December.
The government had in July last year set up a committee headed by former Chief Economic Adviser Shankar Acharya, to examine “desirability and feasibility” of having a new financial year.
Besides Acharya, the members of the committee are former Cabinet Secretary K M Chandrasekhar, Centre for Policy Research Senior Fellow Rajiv Kumar and former Finance Secretary Tamil Nadu P V Rajaraman.
As a colonial legacy, India started following April-March period as financial year after getting Independence.
The NITI Aayog panel, headed by its member BibekDebroy, has also reportedly favoured following the calendar year as the financial year.
A change in financial year would require amendments in various statues and the change in tax laws during the transitional period.