No tangible reason for govt to change Fiscal Year: Assocham

Any move to change India’s financial year from April-March to any other permutation and commutation would serve no purpose but cause a huge avoidable disruption at a big cost for the country’s trade and industry, ASSOCHAM said in a release.

“In any case, different countries follow different financial years and there is no standard accounting practice for the world. So, change to any other calendar would not result into India aligning itself with the world. Besides, even within the domestic economy, there is no tangible reason for the unnecessary change for which the government has set up a committee to deliberate whether there is a need for a shift,” the chamber Secretary General D S Rawat said.

According to Assocham, change in the financial year from April-March which has been in vogue for well over a century, would not only mean a change in book-keeping. Instead, the entire infrastructure in terms of accounting software, taxation systems, HR practices would have to undergo a shift involving costs hundreds of crores of rupees, if not more, for the big and small industries.  

It said the argument that the current financial year (FY) does not allow budget makers to have assessment of the monsoon does not hold good since the agriculture sector contributes less than 15% to the country’s GDP, it added.

Besides, even if the FY is changed to January-December and the Budget is presented some time in October, the monsoon effect would be clear only for the running year but then, the Budget is done for the next year for which dependence would continue on the weather forecast.

“The move to change the fiscal year is akin to a situation where the government in its own wisdom decides to change the Indian driving system from right hand driving to the left hand without realising that it would require changing the entire road and street infrastructure along with changes in the design of the automobiles," said Assocham. 

“Besides, it is the mind set issue. These systems have grown over the psyche of the citizens. The fiscal year is even made co-terminus with the academic years in schools and many universities…..Suddenly, we must not bring in such changes which have no apparent advantage,” the Assocham pointed out.

The chamber said, the feed back from its members suggest that it is an ill-advised move and should be done away with straight away. “Under no circumstances, the move would lead any improvement in ease of doing business. Instead, it would create unnecessary hurdles and bureaucratic and systemic delays. At this point of time, India cannot allow any such disruptions”.