As part of its mission to remove hurdles to effective economic planning, implementation of development projects and to ensure ease of doing business, the Indian Government has set up a high-level committee to access the advantages and disadvantages of picking a different set of dates from the current starting on April 1 and ending March 31 for annual accounting purposes.
According to Ministry of Finance, “The Committee will examine the merits and demerits of various dates for the commencement of the financial year including the existing date (April to March), taking into account the various relevant factors.”
The committee will be headed by former Chief Economic Adviser Shankar Acharya and will also include former Cabinet Secretary K.M. Chandrasekhar, former Tamil Nadu Finance Secretary P.V. Rajaraman and Rajiv Kumar, a fellow at the Center for Policy Research. The committee has been asked to submit its recommendation as well as the modalities for implementation by the end of December 2016.
Also, funds for development projects had been disbursed in April onward, making it hard for implementing agencies to carry out projects in continuity as the monsoon sets in by June, during which, heavy rains in most parts of the country make it impossible to carry out construction works. This gave rise to numerous hurdles, including problems arising out of interruptions to crucial projects and hasty spending towards the end of the fiscal year.
Proponents of the idea advocate choosing dates that would benefit Indian subsidiaries of global companies so that they are able to reconcile their accounting with that of their parent company. Changing the fiscal year dates would require amendments to the statutes and tax laws.
