Desirability and Feasibility of Changing the Financial Year

Desirability and Feasibility of Changing the Financial Year
Last Date Oct 01,2016 00:00 AM IST (GMT +5.30 Hrs)
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The Government of India has appointed a Committee chaired by Dr. Shankar Acharya, former chief economic adviser, to examine the desirability and feasibility of having a ‘new ...

The Government of India has appointed a Committee chaired by Dr. Shankar Acharya, former chief economic adviser, to examine the desirability and feasibility of having a ‘new financial year’. Other distinguished members of the Committee are Shri K M Chandrasekhar, former Cabinet Secretary, Shri PV Rajaraman, former Principal Finance Secretary, Tamil Nadu and Dr. Rajiv Kumar, Senior Fellow Centre for Policy Research.

Presently, the financial year followed by governments in India runs from 1st April to the following 31st March.

This issue was last examined by the L K Jha Committee in 1985, whose recommendation to move to a financial year of January 1- December 31 (for Central and State Governments) was then not accepted by the then Government.

There are many arguments for and against the change in financial year which revolve around issues of budget and cash management by government, seasonality of government revenues and expenditure, impact of Monsoon on budget forecasting, working season, timelines involved in the legislative cycle of passage of Budget by the Parliament, international comparability of fiscal statistics, aligning government’s financial year with year for tax assessment and corporate accounting purposes. Some arguments are less on the intrinsic merit or demerit of the change but rather on the timing of the change when the change coincides with other developments impacting businesses.

This Discussion Forum seeks to invite inputs from everyone interested in this issue.

We welcome your comments, suggestions, information and documents on the Committee’s Terms of Reference and issues related to it. Please provide these latest by 30th September, 2016.

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3540
mukesh maheshwari 3 years 10 months ago

the FY must be changed to Jan-Dec. Internationally it is followed. Lot so time will be saved, further budget should be presented in after monsoon is over and accordingly Gov can foresee how the next fiscal would be. All changes in Budget should be made effective from 1st Jan. Advance tax date should further be changed because after monsoon and festive season corporates are making good earnings and accordingly a part of revenue predicted in the budget can be realised in between Jan-Mar

2900
Prasanna_21 3 years 10 months ago

as a central government employee who has worked in the accounts section for more than 8 years , i think the change of financial year is a welcome step and a break from the past of british rulers. changing of financial year is a sure step in this modern world and a more opt move which may facilitate a lot of easy accounting proceduces and accounts work for the accounts related staff. income tax calculations can be made more esay to calculate just by this change . hats off to THE PM .

32400
bala shetty 3 years 10 months ago

this is about IDS.there are no provision in the site to write about this, but related to finance ,income tax officers giving talk on awareness about IDS.I know at least in places -two pvt medical colleges gave lecture to doctors with manage ment by side of them .it was strange .may be few doctors generating black money ,rest all are on salary.it was tha management to whom they should have lecturing,are they together,does govt know?

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chandrashekhar swamy 3 years 10 months ago

Dear Sir,
Jan to Dec is best feasbile year for our country and corporate and for business world over 50 percent country follow accounting standards

200
Dinesh Gupta 3 years 10 months ago

Respected Chairman of the committee.

On behalf of my organisation "Rastriya DinDarshika Prashar Manch" I would like to make following representation in the subject under discussion.

National Calender of India was adopted by act of Parliament many decade ago but sadly it has not given due recognition both by Government agency and private sector. While recommending new financial year please consider the National Calender as the new financial year of India which enhance pride of nation.

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DINESH SODANI 3 years 10 months ago

It will save lot of duplication & multiple compliances under various Act & laws and also save huge cost involve in Audit/review etc.

We think it should be in line with international Standards for eg 1 jan to 31 Dec

1300
Lakshya Rana 3 years 10 months ago

Financial year is from April to march because the economic dependency is on the agriculture which directly depends on the monsoon(even today), but with the rise of technology and innovation this dependency will decrease, and in future it is pretty sure that the face of agriculture will change completely(it has to be), it would be better to change the financial year now...because it will help the methods other than the agriculture to play the better role in the economic growth of India

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sanjay Kumar 3 years 10 months ago

Please do change the financial year from 1st jan instead of 1st april. this will help us to streamline our financial year with global financial year.....
on a lighter note: 1st April was supposed to be fool's year..