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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)
Reji Konnasseri
Reji Konnasseri 9 years 10 months ago
The LK Jha Committee was appointed in 1985 and may be the way society functned then would be way different than the way society functions now.. We should probably have a re-asssmnt of the situations now, parameters to be considered and then decide whats best for India For e.g.: if we look up globally and are seeking more international collaboratn.. then we need to anlyse how we can bring more profit and benefits to the business that exports and imports good... etc. Though I am not an economist!
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Baghzaad Bhomisha
Baghzaad Bhomisha 9 years 10 months ago
first the committee must understand why existing fy exists and the benefits of the same...how this will impact firms globally..the current system gives breathing space to Indian companies globally to complete their tax returns based on calender year and then have enough time to file returns in India...in short all Indian and foreign MNCs should decide which is the best time they would want it in India...a simple poll will do the trick...besides who wants q4 headache during Christmas time..
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SANJAY DHABALIA
SANJAY DHABALIA 9 years 10 months ago
it is the need of the hour to change financial year from 01 jan to 31 dec as all over the world it is the same and as we are having transforming change to GST which is accepted by 165 countries we also need to change
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Raghav Rathi
Raghav Rathi 9 years 10 months ago
I believe that it would be a great step, especially for the infrastructure related projects. Under the current format, the financial year begins from April 1. By the time the allotted funds reach the respective depts, the onset of monsoon occurs during which, the projects cannot be commenced. Shifting the financial year to Jan-Dec would provide ample time for depts to begin their process and would see a better division of the usage of funds throughout the year.
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jay shah
jay shah 9 years 10 months ago
If the financial year is changed to the calendar year then there are chances that the current system and the current group of operates and the current group of societies who are following the financial system will be having some trouble into changing their financial year to the calendar and during the implementation of the same for the first time it will be difficult because the first three months that is January, February, March will need some adjustments.
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Gaurav Kumar
Gaurav Kumar 9 years 10 months ago
Sir, thank you for inviting us to participate in the decision-making process. Many reasons above seems to have merit but I can not provide deep insight in those. From my perspective, international comparability of fiscal statistics is the key driver. India will stand to gain from the global focus on the yearly budget process. And corporate will benefit from the global planning and allocation.
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Manoj Patel
Manoj Patel 9 years 10 months ago
Yes we celebrates and get bonus on dipawli during October/ November and even farmers use to get their monsoon Corp yield and profit during this period and most of the community servents like teachers, Doctors, lawyers, etc plan their holiday and leisure activity during this period with reference to above all I found majority people had year ending attachment ( feeling )with this period at the same time to avoid celebration charm of festive season December ending usually year ending would be best
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