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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)
Ankur Shah
Ankur Shah 9 years 7 months ago
Budget should be read in January as it will provide monsoon data to support planning. While financial year should be kept to apr-mar, as submission process takes 1-2month. Which will be in sync with educational year.
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Nitheesh Kumara
Nitheesh Kumara 9 years 7 months ago
I would be in favour of change the financial year from april to march,because common people having no knowledge about financing year,they have their own budget based on calender year so it is a perfect time to change the financial year,and now IBPS ( Institute Of Banking Personnel And Selection ) has recruited bank employees,and they published result based on financial year ,that is 1 april ,so this is perfect time change both structures as well
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k venkateswaran
k venkateswaran 9 years 7 months ago
The British concept of the financial Year from April to March is very confusing.We should simplify it, as the financial year as the same as calendar year as in the USA.This will avoid the confusion on financial year and assessment year for tax payers.From Jan 2018 we may start a new financial year as the same as the calendar year.
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Rajendar Singh Dogra
Rajendar Singh Dogra 9 years 7 months ago
I would be in favour of adopting the calender year as the financial year by looking at the effectiveness of techno-economic feasibility of all the budgetary-allocated infra-structural projects. In the present system, the budget is generally passed in May-June. By the time estimates are prepared and contract process is completed, the monsoon season starts, thus the actual implementation of projects starts in September/October which happens to be the beginning of all sort of festivals resulting in
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Sunil Thomas
Sunil Thomas 9 years 7 months ago
Stop changing things for the sake of changing. Renaming cities Mumbai is still BOM. By changing to 01 Jan the only effect would be that a good set of citizens involved with the banking sector will not be able to enjoy their yearend holidays. The government should be having more meaningful jobs to do. Like PM keeps mentioning lot of age old archaic laws need to change to suit the times we live in now.Jaitley trying to explain the benefits is like companies changing their salary day.
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NP MOHAPATRA
NP MOHAPATRA 9 years 7 months ago
Indian Economy is governed by Monsoon.Now the Budget is prepared in Feb , 3 months ahead of monsoon. The Budget can become realistic if it is shifted to June end which will take into account monsoon movement. In Indian Banking , demand , collection and balance is calculated as on 30 June. Therefore, NPA will be more realistic as on 30 June. Thus, the FY July-June should be considered by GOI.
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viral_51
viral_51 9 years 7 months ago
We are with the government for changing the financial year as it solve the major issue while calculating the balance sheet and much other accounting related matter
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NP MOHAPATRA
NP MOHAPATRA 9 years 7 months ago
01.Kharif crops are usually sown with the beginning of the first rains towards the end of May in Kerala during the advent of south-west monsoon. As the monsoon rains advance towards the north India, the sowing dates vary accordingly and reach July in north Indian states.Therefore, the cooperative year still continues to be July-June and not April_mar because it helps the farmers to repay in June.The NPA figure will drastically change if the Financial Year is changed to July-June.
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Debasis Pati
Debasis Pati 9 years 7 months ago
I feel strongly in favor of change of FY from Apr-Mar format to Jan-Dec format. The Reasons are like; As India is an Agriculture Dependent country & most Farmers contribute the Nation with Staple food of Paddy & Wheat which are grown in KHARIF (Jun-Dec). But due to slagness in our Budget Preparation, Approval, Modification & Final Sanction to District level is completed the Kharif has started in full swing. Finalisation of Budget by Jan will help in streamling Agriculture Production Sector.
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