New Delhi: Should India have a new financial year, replacing the existing one which runs between April-March? The Centre on Wednesday set up a committee under former CEA Shankar Acharya to find answer for this question.
In India, the new financial year starts from April 1 till March 31. For example the current financial year is from April 1, 2016 to March 31, 2017. While the Union Budget is presented on the last day of the Febr-uary, its proposals commence from April 1.
Any change in the financial year will change the way governments and companies have been doing their business. 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 one.
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 will have 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,” said a finance ministry notification.
If a change in the financial year is recommended, the committee may also have to work out modalities for effecting the change, which would include appropriate timing of change, determination of a transitional period, the cha-nge in tax laws during the transitional period.
Besides Mr Acharya, the members of the committee are former Cabinet Secretary K M Chandrasekhar, former Tamil Naidu finance secretary P.V. Rajaraman and Centre for Policy Research Senior Fellow Rajiv Kumar....