India all set to align its financial year with the calendar year. As per the sources, India could shift to a January – December financial year from the year 2018, as the Centre appears to make the historical transition to end the 150 year old tradition of an April to March fiscal.
Accordingly, the next Union Budget could be presented by the National Democratic Alliance (NDA) in November this year. This would be another historic change after advancement of the Budget presentation to February 1 this year, ending the decades-old practice of presenting the annual exercise in the last week of February.
The financial year from April 1 to March 31, currently in vogue nationally, was adopted in 1867 principally to align the Indian financial year with that of the British government. Till then, the financial year in India used to commence on May 1 and end on April 30 of the following calendar year.
After Modi expressed his desire to align the financial year with the calendar year, the government had last year appointed a high-level committee to study the feasibility of shifting the financial year to January 1.
A few months back, the Parliamentary Standing Committee on Finance also recommended shifting the financial year to the January-December. Modi while advocating a change in the financial year had said that there is a need to develop robust arrangements that could function amidst diversity. “Because of poor time management, many good initiatives and schemes had failed to deliver the anticipated results,” the prime minister had said.