While the process will be gradual, some states like Madhya Pradesh have announced their intention to transfer to the new cycle. Earlier, the Niti Aayog in a discussion paper studied the need for changing India's financial year and suggested various options for effecting such a change in a smooth manner, as it would require various amendments in existing laws.
"We are looking at options-.One of them is to change the financial year (now running April to March) to the calendar year: For that, the budget will have to be advanced to November", a senior government official said. It will also ease in doing business with investors and multinationals who follow the calendar year as financial year.
Recently, Prime Minister Narendra Modi made a pitch for shifting the fiscal year to the January-December period during NITI Aayog's governing council meet in the national capital. "The decision by Madhya Pradesh government has been taken in haste and will have to be rolled back if the Centre defers any change in fiscal", said chartered accountant Pramod Sharma.He pointed out that the financial year - as per Income Tax Act, Companies Act and Goods and Services Tax (GST) Act - is still from April to March. "There have been suggestions to have the financial year from January to December". This would largely benefit the MNCs investing in India that have to deal with multiple economies.
The committee stated that the move would align the fiscal with the monsoon cycle and the country's agricultural harvests. "Now, the financial year will start in January and end in December", CM Shivraj Singh Chouhan said.
In view of the state's new financial year, Chouhan directed all ministries and departments to prepare a quarterly, half-yearly and annual road map of works to be done with fixed deadlines in order to conclude the current financial year by December.