Soon You Could Be Filing IT Returns In March, As Modi Backs A January-December Fiscal Year

Prime Minister Narendra Modi on Sunday indicated his backing for a January-to-December fiscal year, a move that could entail a reworking of dates for budget presentation and your financial calendar, including filing of tax returns.

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"Stating that in a country where agricultural income is exceedingly important, budgets should be prepared immediately after the receipt of agricultural incomes for the year... he (Modi) said there have been suggestions to have the financial year from January to December. He urged states to take the initiative in this regard," an official statement on the PM's closing remarks at Niti Aayog's governing council meeting said. The PM said GST would go down in history as a great symbol of federalism. He also urged CMs to carry forward the debate on simultaneous Lok Sabha and assembly elections. The budget presentation date was advanced from the last day of February to February 1 this year. Modi had also set up a committee to examine the possibility of changing the financial year, which begins on April 1.

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PM Narendra Modi batted for a shift to a January-December fiscal year at a meeting of the Niti Aayog's governing council meeting on Sunday. The current financial year in India ¡ª April to March ¡ª was adopted in 1867, principally to align the Indian financial year with that of the British government. Earlier, India's financial year used to commence on May 1. While Modi did not set a deadline for the transition in the financial year, he urged the states to make legislative arrangements "without delay" for the rollout of Goods and Services Tax (GST) from July 1.

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The statement is significant as a section of industry is lobbying for deferring the implementation to September. Modi said that the consensus between the Centre and the states on GST reflected the spirit of "one nation, one aspiration, one determination". Noting that the consensus on GST will go down in history as a great illustration of cooperative federalism, Modi urged CMs to carry forward the debate and discussion on simultaneous elections. Pointing out that the CMs did not have to come to Niti Aayog for approval of budgets or plans, the PM said that while there has been a 40% increase in overall fund allocation to states between 2014-15 and 2016-17, the percentage of funds tied to central schemes has declined from 40% to 25%. Calling upon states to "speed up capital expenditure and infrastructure creation" to spur economic growth, Modi said the vision of 'New India' can only be realised through the combined efforts and cooperation of all the states.

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"Team India" has assembled here to discuss and reflect on ways to prepare the country for changing global trends, Modi said. It is the collective responsibility of this gathering to envision the India of 2022 - the 75th anniversary of Independence - and see how the nation can swiftly move forward to achieve these goals, he added. Speaking of the historic change in budget presentation date, the PM said this would enable timely availability of funds at the beginning of the financial year.

Modi mentioned the ending of the distinction between plan and non-plan expenditure, based on the recommendation of the Rangarajan Committee in 2011, which had found the distinction to be counter-productive. "Several important items of expenditure were included as 'non-plan' and hence neglected. Hereafter the emphasis would be on distinguishing between development and welfare expenditure on one hand, and administrative overheads on the other," he said. As several CMs raised the issue of regional imbalance, Modi agreed that the issue has to be addressed on priority, both nationally, and within states. He said the use of technologies such as BHIM and Aadhaar would result in significant savings for the states.