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Desirability and Feasibility of Changing the Financial Year

Start Date :

Aug 24, 2016

Last Date :

Oct 01, 2016

00:00 AM IST (GMT +5.30 Hrs)

Submission Closed

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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All Comments

Showing 816 Submission(s)

Dipak Shah_3 8 years 11 months ago

We have to value our tradition, culture and our ethics. Earlier our financial year ends on DIPAVALI. but somehow it had changed as per English Calendar from April to March. We have to change our Mental Condition and need to come out from Mental Slavishness of English and English culture.

Yogeshindelhi 8 years 11 months ago

When all global companies are doing business and transition in india. And we all are using of these products or having business then it better make uniformity. And we can save our time & money becuaee once we busy for their year closing & after six month again we closing out domestic financial year.
And software are made for us not we are made to use software and in January new year is clebrated world wide.
My suggestion is since we are moving towards a globalisation of ecronmy.

umashankargoel 8 years 11 months ago

There is no benefit of changing financial year. It will only incur lots of cost as all the financial software (private or public ) needlessly need to be changed. Also, changing to 1st Jan to 31st December will coincide with New Year celebrations and those involved in financial sector due to annual closing will be more pressurized. Meaningless change in every aspect. Instead govt could use resources in betterment of people of India.

skbhatnagar 8 years 11 months ago

Change is always better particularly when you are not doing good.But I feel only two relevant point for an Indian Financial year.
1.Monsoon cycle or Crop cycle.
2.International compatability.

harsha.yash 8 years 11 months ago

We can change our financial year as per the Indian calendar (Saka calendar), which is more or less coincides with the existing FY. This doesn't require much of adjustment/documentation.

srinivasa rao_32 8 years 11 months ago

No matter whether the financial year should be 1st April to 31st March or 1st January to 31st December. But the leave policy of employees is constrained to the calendar year, it is better to follow the financial year , educational academic year and such the annual term of any department should be fixed with calender year only. OR annual year of all sectors should be unique.
Thank u