Govt won’t switch to new fis­cal cy­cle any time soon

May be con­sid­ered af­ter 2019; Cen­tre fears move may add to dis­rup­tion from note ban, GST

The Hindu Business Line - - FRONT PAGE - SURABHI

The Cen­tre seems to have shelved its plans to change the fi­nan­cial year cy­cle, at least for the time be­ing. With the de­mon­eti­sa­tion of high-value notes and the roll­out of the Goods and Ser­vices Tax (GST) caus­ing a tem­po­rary dis­rup­tion, sources said the gov­ern­ment is keen to en­sure that the econ­omy is not un­set­tled fur­ther.

Though prepa­ra­tions for the Union Bud­get 2018-19 have be­gun, the change in fi­nan­cial year cy­cle could hap­pen only af­ter 2019.

Cur­rently, the Cen­tre fol­lows a fi­nan­cial year be­gin­ning April 1 and end­ing on March 31. Last July, the Fi­nance Min­istry had set up an ex­pert panel, led by for­mer Chief Eco­nomic Ad­viser Shankar Acharya, to ex­am­ine the “de­sir­abil­ity and fea­si­bil­ity” of hav­ing a new fi­nan­cial year cy­cle.

The com­mit­tee’s re­port was not made avail­able to the pub­lic, but it is un­der­stood to have rec­om­mended a fis­cal year co­in­cid­ing with the cal­en­dar year, that is, from Jan­uary 1 to De­cem­ber 31.

“A change in the fi­nan­cial year cy­cle is still un­der ac­tive con­sid­er­a­tion, but its im­ple­men­ta­tion any time soon is un­likely,” said a source. It may now be taken up af­ter 2019, the source said.

The is­sue is also un­der­stood to have come up for dis­cus­sions dur­ing pre-Bud­get meet­ings of the Fi­nance Min­istry with Nodal Min­istries to fi­nalise their Re­vised Es­ti­mates for 2017-18 and their Bud­get Es­ti­mates for the next fis­cal.

Some Min­istries are un­der­stood to have made en­quiries on a pos­si­ble change in the fi­nan­cial year cy­cle.

Fi­nance Min­istry of­fi­cials had ear­lier said that such a shift would not be very dif­fi­cult as it would only mean hav­ing three quar­ters in a fis­cal for one year.

The Cen­tre had also urged States to fol­low suit. Mad­hya Pradesh has al­ready an­nounced a switch to the new fis­cal year cy­cle.

Global agen­cies and many coun­tries fol­low the Jan­uaryDe­cem­ber fi­nan­cial year. For In­dia, it is felt that the cal­en­dar year cy­cle would help im­prove the flow of ex­pen­di­ture be­fore the mon­soon sets in. Fi­nance Min­is­ter Arun Jait­ley

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