Government forms panel to study the feasibility of adopting new financial year

NEW DELHI: The government has constituted a committee to study the feasibility of adopting a new financial year. India currently follows the April-March financial year as opposed to the calendar year in most countries.

The committee headed by former chief economic advisor Shankar Acharya has to submit its report by December 31, 2016. “The committee will examine the merits and demerits of various dates for the commencement of the financial year including the existing date (April to March), taking into account the various relevant factors,” the finance ministry said in a statement.

Former cabinet secretary KM Chandrasekhar, former finance secretary of Tamil Nadu PV Rajaraman and Rajiv Kumar, senior fellow at the Centre for Policy Research, are the other members of panel.

India is the only one among the big countries to follow the April-March financial year, which makes international data comparisons difficult.

The LK Jha Committee appointed in May 1984 to look into the matter had recommended switching over to the calendar year. The government did not accept the recommendation.

Most companies in India also follow the April-March financial year.

The committee has also been tasked with suggesting a transition road map should it suggest a new financial year.