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Desirability and Feasibility of Changing the Financial Year

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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Showing 816 Submission(s)
ameya.joshi@gmail.com
Ameya Joshi 8 years 2 months ago

- Existing budget process leads to spending of resources only post monsoon, since major infrastructure works cannot be done in monsoon and budget approvals happen only by May.
- The change will help work progress over two seasons and help plan well and finish on time
-

ameya.joshi@gmail.com
Ameya Joshi 8 years 2 months ago

Considering major economies of the world have calender and financial year as same, it will be prudent to change the Financial year to Jan - Dec instead of Apr - Mar

The benefits would be
- Better integration with global economy
- Most companies and services conduct a closing audit for December to comply with their global corporations. They will save cost in doing the work multiple times.

vishalbakshy.606a@gov.in
Vishal Bakshy 8 years 2 months ago

The change over to calendar yr as financial year will be beneficial if the advantages outweigh disadvantages. The background given to the discussion does not list these pros and cons. It would have been better had it been done to analyze the issue in its entirety.

kms7777@ymail.com
Kulin Shah 8 years 2 months ago

Most of the discussions on the desirability of changing the financial year are centred on the seasonality of income, expenses, monsoon, etc., only because government’s revenues come in seasonally…..…… After making the income regular the effects of seasonality are made redundant. And then it does not matter when the financial year starts……....this could simplify the whole budget passage process and ensure the passage of budget and avoid any vote on account. Please see the pdf for all suggestions.

Vinit Dave_1
Vinit Dave 8 years 2 months ago

I AM GIVING TWO SUGGESTION FOR NEW FINACIAL YEAR.
(1)OCTOBER - SEPTEMBER.(FIRST PREFERENCE)
(2)JANUARY - DECEMBER. (SECOND PREFERENCE)

hiteshsharma039@gmail.com
HITESH SHARMA 8 years 2 months ago

Can we implement service tax on Sex Workers as this profession is growing but there is no income of govt from this profession.

LOKESH THIMMEGOWDA
LOKESH THIMMEGOWDA 8 years 2 months ago

Budget Must be presented in the Month of October/November Parliament Session.. and Should b effective from 1st Jan of each Year..
Advantages:
1. complete clarity on Financial Year viz., In the financial year 2016 or 2017
(It will do away with 2016-17 which is more confusing.)
2.Any construction related activity will not kick start because allocation of fund takes place after April and 2 month after that Rainy season starts and there is presure from oct-mar to spend money.
follows
2.