Why PM Narendra Modi wants India to dump a 150-year-old financial habit

Among the many things Prime Minister Narendra Modi is likely to talk about in his fourth Independence Day speech this month is a proposal to change a 150-year-old practice that goes behind fixing India’s Budget and much of your financial planning.

He may push for a January-to-December fiscal year instead of the current financial year — from April to March — that was adopted in 1867, principally to align the Indian financial year with that of the British government.

If the calendar year comes into place, the budget dates will need a fix too. The Centre then gets to squeeze in a budget in November 2018, six months before the general elections in May 2019. In November, the government may come up with all the populist measures with a hope of impressing the voters. It also gives the Centre ample time to adjust to new realities like GST, domestic and global uncertainties.

While it may look like a seemingly straightforward step at keeping up with a global benchmark, there’s more to it than meets the eye.

So far, the Centre has ruled out any such move. “In order to start the next financial year from January 2018, the government needs to present the Union Budget some time in November, which does not seem to be possible as the process is time-consuming and has to be kicked-off well ahead,” minister of state for Finance Santosh Gangwar said. “These are points of discussion in the government. For now, consider March as the end of this fiscal year.”

source: Economic Times