Centre forms panel to look into feasibility of new fiscal year cycle
The government on Wednesday set up a committee to examine the option of moving to a new financial year cycle, replacing the existing AprilMarch period.
The committee, headed by former chief economic adviser Shankar Acharya, will study the “desirability and feasibility” of moving to a new financial year cycle, the finance ministry said in a notification.
Different countries follow different financial years. For the US government, it runs from October 1 to September 30, and in Australia from July 1 to June 30. China follows a January 1-December 31 financial year.
Countries like Canada, the UK, New Zealand, Hong Kong and Japan follow an April 1-March 31 financial year like India.
A new cycle will force changes in a string of activities, including finalisation of accounts, filing of returns and the government budget, which is usually presented in February, a month before the financial year ends.
The committee, which will submit its report by December, will examine the merits and demerits of different financial year cycles, including the existing one (April-March), the ministry said.
This is not the first time India has looked at changing its financial year cycle. In 1984, the LK Jha committee had recommended moving to a January-December format. One main argument in favour of moving away from the existing cycle is that the JuneSeptember monsoon — often called the Indian economy’s lifeblood — sets in barely two months into the financial year, making policy making difficult.
Besides Acharya, the members of the committee are former Cabinet secretary KM Chandrasekhar, former Tamil Nadu finance secretary PV Rajaraman and Centre for Policy Research senior fellow Rajiv Kumar.