Panel bats for changing financial year to January-December
India is the only one among the big countries to follow the April-March financial year, which makes international data comparisons difficult. On the suggestion of think-tank NITI Aayog the government set up a committee headed by former chief economic advisor Shankar Acharya in July 2016 with a mandate to examine the desirability and feasibility of having a new fiscal year .The committee has submitted its report recently and recommended changing the financial year from the current April to March to the calendar year January-December.
Former cabinet secretary KM Chandrasekhar, former finance secretary of Tamil Nadu PV Rajaraman and Rajiv Kumar, senior fellow at the Centre for Policy Research, were the other members of the committee.
The committee examined the suitability of the fiscal year from the point of view of correct estimation of receipts and expenditure of central and state governments; effect on agricultural crop periods; impact on businesses, taxation systems and procedures, statistics and data collection; the convenience of legislatures for transacting budget work; and other relevant matters.
After India switched to gross domestic product (GDP) at market prices from GDP at factor cost to calculate its national income, it made its macroeconomic data internationally comparable. However, multilateral institutions still have to make separate calculations for India’s fiscal year as it is among the few countries not following a January-December fiscal year.