Madhya Pradesh Becomes First State to Shift Financial Year to Jan-Dec Format

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Becoming the first state in India, Madhya Pradesh state government today took a decision to change its financial year format to calendar year i.e.. January-December starting 2018, as against the current practice of April-March cycle.

The Financial Year

Highlights

  • Decided to shift the fiscal year January to December
  • The change in the financial year will kick in from January 2018.
  • Shift will help in better economic and political management of India.
  • The shift is the outcome of NITI Aayog governing council meeting
  • The move breaks a 150-year tradition as India started adopting the April-March financial year from 1867.
  • He had reasoned that as agricultural income is exceedingly important, budgets need to be prepared immediately after the receipt of agricultural incomes for the year.
  • Changing the financial calendar to January-December makes more economic sense.
  • This is when the festive season is over
  • It is also more suited to India՚s cropping pattern

Implications

  • Shifting of the financial year format to January-December would require shifting of the tax assessment year.
  • It also necessitates changes to be made in infrastructure especially at the level of companies.

About NITI Aayog

  • NITI Aayog or the National Institution for Transforming India is a Government of India policy think-tank established by the Narendra Modi government to replace the Planning Commission
  • The stated aim for NITI Aayog՚s creation is to foster involvement and participation in the economic policy-making process by the State Governments of India

Map

Location of Madhya Pradesh in India Map

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