Madhya Pradesh becomes the first state to announce the shifting of its financial year aka fiscal year to January-December from the current format of March-April cycle. This decision was declared during the state cabinet meeting as a move after PM Modi’s backing on shifting the fiscal year in the third general meeting of NITI Aayog.
Government spokesman Narottam Mishra announced the decision after the Cabinet met under the chairmanship of Chief Minister Shivraj Singh Chouhan. Madhya Pradesh will have the newly set fiscal year frame of January-December from 2018. This step could bring major impact on the economy of the state.
The fiscal year March-April has been followed in India since 1867 from the time of British rule and was adopted to coincide the British fiscal year; before British rule, the financial year was May-April. The major reason of shifting the financial year was the difficulties faced by the government in collecting stats in relation with monsoon and agricultural income. Due to this, budget estimation has always been a buggy issue and this shift will allow the government to execute the budget estimation process more effectively and in ordinance with the crucial agricultural stats.
The budget presentation date will also be advanced from the last day of February to the first day of February. And the state government will try to complete the current budget proceedings by December this year. The long-term economic benefits are expected to outweigh the immediate costs and difficulties with regard to the implementation of the change. And January-December financial year will also allow ease of doing oversea businesses and investments from the next year in Madhya Pradesh.