Mumbai, June 26: After changing the Annual Budget announcement date this year, the Narendra Modi government is readying to make yet another major and historical change, by adjusting the start of the financial year to January, instead of April. This effectively means that the Budget will be presented in November this year. The change, if put into effect, will mark the end of a 150-year-old tradition. Also Read - Delhi Man Arrested For Posing as Senior Bureaucrat, AIIMS Professor to Cheat People
Media reports said that sources close to the Cabinet have confirmed that the financial year will be aligned with the calendar year from 2018, as the PM wants the change. This comes after the budget was advanced by weeks and was announced on February 1, 2017, instead of the end of the month, as has been customary since decades. The Budget is expected to be held in November this year, as it takes nearly two months for the budgetary exercise to get completed. Also Read - When Will Indian Economy Revive? Here’s What NITI Aayog Vice Chairman Rajiv Kumar Has to Say
The current financial year starts from April 1 and ends on March 31 and it was adopted in 1867, primarily to align the Indian fiscal year with that of the British government. Reports of a shift in the financial year had cropped up last year, when Modi had expressed his desire to make the change. A high-level committee was appointed to explore the feasibility of the idea of advancing the start of the financial year to January 1, from April 1. Also Read - PM Narendra Modi Reviews India's COVID-19 Vaccination Strategy
The committee had submitted its report to the Finance Ministry in December last year. A NITI Ayog note had earlier said that a change in the financial year was necessary as the current system was leading to to sub-optimal utilisation of working season. The note further said that the current fiscal year was decided upon without any reference to India’s culture and traditions, neither was the convenience of the legislators factored in the timing.
The current financial year also impeded data collection and dissemination process, with relation to national accounts, as it’s not aligned with international practices. Besides the Aayog, the Parliamentary Standing Committee on Finance had also recommended shifting the financial year to January-December.