A Parliamentary Panel has suggested that the financial year in India should be shifted to January-December cycle from the current April-March cycle. The Parliamentary Panel reasoned that the April-March cycle was adopted in 1867 to suit the fiscal year of the British government and since there are no such constraints now, the financial year should be shifted to January-December. The panel also suggested that once the financial year is shifted to January-December, the annual budget can also be further advanced.
It may be recalled that the government had appointed a high-level committee in 2016 to study the possibility of shifting the fiscal year to January-December cycle. The committee submitted the report to the government in December last year and had favored the shifting of financial year. The shifting of financial year has also been supported by a Niti Aayog panel, headed by its member Bibek Debroy. Experts say that shifting the fiscal year to January-December cycle would be a mammoth task, as it would necessitate a wide variety of amendments and changes in taxation laws.