The previous financial year timing did not allow India to account the impact of monsoon rains
The shift will keep the country in tune with the global practice as most big economies follow the January to December cycle.
Almost 156 nations follow this financial year
The top firms like World Bank and IMF uses the calendar year for data reporting
Foreign firms don՚t have to struggle with two types of financial years, here and at their parent country, which means better business for us.
It will allow the business firm to have fuller utilization of the resources of the working season
As there is a direct impact on data collection for natural accounts
It will take the weather into the account and there will be stability in calculating the crops and monsoons work
Apart from changing the Budget date, India will have to rework its tax assessment year, reorganize tax infrastructure, including at firm level and, probably even tweak the Parliament session timings.
There are few states which are not in favor of this, especially when they are trying to cope with the GST rollout and Plan and non-Plan expenditure merger.
What is Financial Year?
It is a period which is used by the government for accounting and budget purposes
It is also used by the business and other organization for financial reporting
There are many jurisdiction which require company financial reports to be prepared and published on a generally annual basis
The government՚s governments financial year runs from 1st April to 31st March
The current fiscal year was adopted by the colonial British government in 1867 to align India՚s financial year with that of the British Empire