In yet another significant change to its annual accounting system, the government seems to have approved in principle to syncing the financial year with the calendar year.

It is, however, not clear whether the switch will take place from 2017-18 or from the next financial year. The financial year currently begins April 1.

“The government can prepare accounts for a period of nine months for 2017, but there is a paucity of time. At the very least, the Budget could include a statement of intent that the Centre would move to a new financial year cycle,” said a person in know of the development.

Finance Ministry officials remained tight-lipped about the development but sources said an announcement is likely in the Union Budget on February 1.

“Such a move has its benefits as it would help in better Budgeting and also maintain the flow of expenditure through the year,” said the source. The Finance Ministry had in July last year set up an expert panel, led by former Chief Economic Adviser Shankar Acharya, to examine the “desirability and feasibility” of having a new financial year.

The committee, which submitted its report last month, is understood to have favoured the move to a new fiscal year cycle of January to December.

Such a fiscal year would be in line with the practice of international agencies and some other countries, and more importantly, it would ensure the flow of expenditure starts before the monsoon sets in.

This would also boost the government’s efforts to improve the quality of spending, especially on capital assets, for which it has also advanced the Budget timeline and scrapped the distinction of Plan and Non-Plan expenditure.

Under the current fiscal year cycle of April to March, most spending flows out from Ministries by June after the passage of the Budget and Finance Bill by Parliament.

However, by then the monsoons also kick in and expenditure on development and construction activities has to be postponed till later in the year.