Next Budget likely in Jan T Govt mulls gradual switchover to Jan-Dec fiscal year A K BHATTACHARYA New Delhi, 1 May

he Union government is taking preparatory steps to switch over to a new financial year cycle that will start from January and end in December. At present, the government’s financial year starts in April and ends in March.

According to top government sources, the switchover will be a gradual process. To begin with, the next Union Budget presentation date is likely to be advanced by about a month, to prepare the ground for a change in the financial year. This year's Budget, which in the normal course would have been presented on February 28, was unveiled on February 1, advancing its presentation by almost four weeks. “A change in the financial year would be best signalled by an advancement of the presentation of the Union Budget, which would also make sure that the government’s financial year planning is in tune with the new cycle,” said a senior government official.

There is, however, no clarity yet on whether advancing the Budget presentation date to early January would pave the way for the switchover to the proposed financial year cycle of January-December from next year. For that to happen, the Union Budget needs to be presented in December. It is, therefore, likely that the target date for launching the new financial year cycle could be January 2019. The Union government is aware that the experts committee, headed by former Chief Economic Advisor Shankar N Acharya, had not favoured a change in the current financial year cycle. While the committee’s views are still being examined, the government has begun seeking different views on the issue as its mind is inclined towards a change. Prime Minister Narendra Modi had asked chief ministers at a meeting of the NITI Aayog that they should examine the idea of a financial year change and make suggestions to the Centre on how this can be implemented.

An ideal situation would be where the state governments also switch over to a January-December financial year cycle, according to the sources. But if the Centre adopts the January-December cycle, states too would have to fall in line. Hence, an attempt is being made to secure the consent of the states to the financial year change.

A change in the government’s financial year will also affect the various dates of tax payments by individuals and corporations. The modalities of such changes are yet to be worked out.