The Union Finance Ministry has constituted four members committee to examine the feasibility and desirability of having a new financial year.
The committee has been tasked to examine the merits and demerits of various dates for the commencement of the financial year including the existing date (April to March) by taking into account the various relevant factors.
Composition: The committee will be headed by Dr. Shankar Acharya (former Chief Economic Adviser). Besides it will consist of PV Rajaraman (former Finance Secretary, Tamil Nadu), KM Chandrasekhar (former Cabinet Secretary) and Dr. Rajiv Kumar (Senior Fellow, Centre for Policy Research) as its members.
Terms of Reference of Committee
Take into consideration genesis of the current financial year and the earlier studies made in the past on the desirability of change in financial year.
It will take into consideration suitability of the financial year from point of view of
(i) Correct estimations of receipts and expenditure of Union and State Governments. (ii) Effect of the different agricultural crop periods.
(iii) Relationship of financial year on the working season.
(iv) Impact on business.
(v) Taxation systems and procedures.
(vi) Statistics and data collection.
(vii) Convenience of the legislatures for transacting budget work.
(viii) Other relevant matters Recommend the date of commencement of the financial year which in its views is most suitable for the country.
In case the committee recommends change in financial year, it will also work out on the modalities for effecting the change. It will include
(i) Appropriate timing of change
(ii) determination of transistional period
(iii) Changing tax laws during transitional period
(iv) Amendments needed in various statues
(v) Changes in coverage of the recommendations of the Finance Commission.
It can interact with experts, institutions, Government Departments and others as deemed necessary.
The committee will submit its report to the Union Government by 31st December 2016.