Like many things in India even the financial year is a legacy of the British Colonial rule. But if a committee set up by the Centre finds it feasible, the April-March financial calendar will be shown the door and a new financial calendar will take its place.
According to reports, the committee will examine the benefits, if any, of shifting to a different cycle. The Finance Ministry said in a notification late on Wednesday that the committee would examine the “desirability and feasibility” of such a year.
Headed by former CEA Shankar Acharya, the committee includes former Cabinet Secretary KM Chandrasekhar, former Tamil Nadu Finance Secretary PV Rajaraman and fellow of the Centre for Policy Research Rajiv Kumar.
The committee will file its recommendations while taking into account the government’s budget process, the agricultural crop season, impact on businesses, and the correct estimation of receipts and expenditure of the Central and state governments.
If the committee recommends changing of the fiscal year, it will also have to provide the government a transition plan, the appropriate timing of change, and any change in tax laws.
“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 amendments are needed in various statues, the committee will also have to suggest those.
The committee may interact with experts, institutions, and government departments for framing its report, the notification said.