New Delhi–The central government has invited public opinion on changing the financial year from the current April 1 to March 31 period, with the aim to improve the issues of budget and cash management.
“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,” a post read on the mygov portal.
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, the post said.
The last date for submitting views on the change in financial year is September 30.
The government has appointed a four-member committee chaired by Shankar Acharya, former Chief Economic Adviser, to examine the desirability and feasibility of having a “new financial year”.
The committee, which has been asked to submit its report by December 31, will examine the merits and demerits of various dates for commencing the financial year, including the existing April 1.
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 not accepted by the then government.