Government panel to look into feasibility of having new financial year
New Delhi: Government on Wednesday said it has set up a committee, headed by former CEA Shankar Acharya, to examine the feasibility of having a new financial year, replacing the existing April-March period.
The committee, which will submit its report by December, will examine merits and demerits of various dates for commencement of a financial year, including the existing dates (April-March), Finance Ministry said.
The ministry, in a notification said, the government has constituted a committee, headed by former Chief Economic Adviser Shankar Acharya, to examine "desirability and feasibility" of having a new financial year.
Besides Acharya, the members of the committee are former Cabinet Secretary K M Chandrasekhar, former Finance Secretary Tamil Nadu P V Rajaraman and Centre for Policy Research Senior Fellow Rajiv Kumar.
The committee will have to provide reasoning for the suitability of the financial year from the point of view of correct estimation of receipts and expenditure of central and state governments.
It also has to state its effect on the different agricultural crop periods and the relationship of financial year to the working season. Besides, the committee will also have to analyse its impact on businesses, taxation systems and procedures, statistics and data collection and the convenience of the legislatures for transacting budget work.
The committee will also have to provide the government with the genesis of the current financial year and the studies made in the past on the desirability of change in financial year.
"The Committee may, after due examination of all relevant factors, recommend the date for commencement of the financial year which in its view is the most suitable for the country," the notification said.
In case a change in the financial year is recommended, the Committee may also work out modalities for effecting the change, which would include appropriate timing of change, determination of a transitional period, the change in tax laws during the transitional period.
It will also have to work out modalities for the amendments that may be required in various statues and changes in the coverage of the recommendations of the Finance Commission. The committee may interact with experts, institutions, and government departments for framing its report, the notification said.
