New Delhi: The Government plans to shift the financial year to January-December, said a report on Tuesday. Currently, the financial year follows the April-March pattern. The move, said a report on Zee News, is aimed to align it with the agriculture production cycle. (Also read: 7 Income Tax Changes Applicable From April 1, 2018)
An announcement regarding this is likely to be made soon, said the report.
While addressing chief ministers at the Governing Council of NITI Aayog, Prime Minister Narendra Modi had batted for the January-December financial year last year and had said that in a country where agricultural income is exceedingly important, budgets should be prepared immediately after the receipt of agricultural incomes for the year.
A couple of years ago, the Centre had set up a high-level committee to study the feasibility of shifting the financial year to January 1 from the current April 1 date. The committee submitted its report, reasoning for the change and its effect on the different agricultural crop periods and its impact on businesses, the taxation system and procedures, statistics and data collection.
That same year, in 2017, Finance Minister Arun Jaitley in a written reply to a question in the Lok Sabha had said that the matter of changing the financial year was under consideration. A senior government official was also quoted by The Economic Times saying, “For now (2018-19), changing the financial year appears unlikely. Switching this year would mean the budget would have to be presented by end of October or early November, which is unrealistic.”
The government also advanced the Budget presentation by a month to February 1 with a view to completing the legislative approval for annual spending plans before the beginning of the new financial year. As a result, public expenditure started from April 1. The Government also merged the separate railway budget with the general budget.
Till last 2016, the Budget was presented on the last day of February and it used to be passed by Parliament by mid-May.