Govt looks at change of financial year

The government is engaged in extensive consultation with states and other stakeholders on whether India’s financial year (April-March) needed to be changed, after a government-appointed committee recommended a change.

“Such reports not only have implications as for as the Central government is concerned, but also they have implications on the state governments and on the local bodies because that will run across. Therefore, it is necessary to have a very wide consultation and application of mind on all the aspects of the matter keeping both arguments in view,” Jaitley said replying to questions in the Lok Sabha.

The Shankar Acharya Committee is believed to have recommended advancing the financial year to January 1.

Jaitley said the India’s financial year is based on the British tradition. It varies from one country to another. In some countries, the financial year begins from January or even June, depending on the local requirements.

He said one aspect of the budgetary exercise has been taken care of this year by advancing the date of presentation of the Union Budget to February 1. The early passage of the Finance Bill would help the government allocate funds to various ministries and states at the beginning of the new fiscal which earlier was done in the middle of the year.

To a question on having financial year defined in the Constitution itself, Jaitley said it was a matter of executive domain and that it was not necessary to incorporate each and every administrative details in the Constitution.