Need to change the financial year? Centre sets up panel to answer the question

NEW DELHI: The government has constituted a committee to study the feasibility of adopting a new financial year. India currently follows the AprilMarch 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 commen cement of the financial year inclu ding the exis ting 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 the committee. 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 it, reasoning that it would cause a large number of problems as most Indian companies follow the AprilMarch financial year.