New Delhi, May 2, 2017
Days after Prime Minister Narendra Modi backed January-December fiscal year, Madhya Pradesh on Tuesday announced that it will implement the change by presenting its next annual budget in December this year.
Government spokesman Narottam Mishra announced the decision after the Cabinet met under the chairmanship of Chief Minister Shivraj Singh Chouhan.
Prime Minister Narendra Modi had made the proposal at the third governing council meeting of NITI Aayog held last week on Monday. The prime minister said that the move could have a significant impact on the national economy. The present financial year runs from April to March. The change in Madhya Pradesh’s fiscal period will mean that the financial year will coincide with the calendar year.
In the meeting, PM Modi had said: “Because of poor time management, many good initiatives and schemes had failed to deliver the anticipated results,” adding that there is a need to develop robust arrangements that could function amidst diversity. He called for taking the debate into Parliament and state Assemblies.
The April-March financial year has been followed in India since 1867 from the time of British Raj. It was adopted to coincide with the British financial year. Prior to that, India’s financial year was May-April.
One of the major reasons behind the change in financial year argued by the NITI Aayog, which published a paper advocating the move last year, was the difficulties faced by the governments in collecting statistical data in relation to monsoons and agricultural income. The change in the fiscal will allow the government to execute the budget estimation process more effectively as it will get timely access to crucial statistical data.
A commission was set up by the government to look into the matter in 2016. A parliamentary panel gave the nod for the matter to be taken forward. Several statutes and taxation laws will need amendments for the change to actually take place. However, the long-term economic benefits are expected to outweigh the immediate costs and difficulties with regard to the implementation of the change.
It will also allow ease of doing business in the state for many of the big multinationals and investors who follow January-December fiscal.
[The Indian Express]