Govt panel to take call on new financial year
The government has set up a committee to examine whether the financial year should commence from April, as is the norm currently, or some other date.
A shift would entail changes in our everyday life -beginning from the date of salary revision to filing tax returns and for the government, it would mean an alteration in the entire budget process. In case of a change, India’s financial year could be aligned with several countries, most of whom follow a calendar year model. China, Brazil and Russia are in this group, accor ding to data on the Central Intelligence Agency website.
India follows the British model where the fiscal year begins on April 1. Several other large economies do not follow the calendar year. For instance, the US financial year begins from October 1, while Japan and South Africa follow the April-March cycle.
While officials have spoken about the possibility of changing the fiscal year in private, the finance ministry on Wednesday set up a panel headed by former chief economic adviser Shankar Acharya to examine the feasibility of having a new financial year.
“The committee will examine the merits and demerits of various dates for the commencement of the financial year including the existing date (April-March), taking into account the various relevant factors,“ the ministry said.
The government realises the difficulty involved in moving to a new financial year and the panel will have to examine the suitability of factoring in various issues such as estimation of government receipts and spending, the relationship with crop year for various farm products.
In addition, it has to analyse the impact on businesses, taxation systems and procedures, statistics and data collection and the convenience of the legislature in transacting budget work.
amar ujala newspaper 07/07/2016 : http://epaper.amarujala.com/login.php