Telangana to ride calendar for fiscal year on Niti nudge

HYDERABAD: Telangana government decided to change its financial year from current April-March cycle to January-December in tune with Niti Aayog recommendations. If all goes well, the state wants to make the shift by January 1, 2018.

Sources said the decision to dovetail the fiscal year with the calendar was taken by chief minister

K Chandrasekhar Rao

on Tuesday after principal finance secretary

K Ramakrishna Rao

submitted a report earlier in the day.Discussing the matter with senior officials, including chief secretary SP Singh, the chief minister decided to implement Niti Aayog's proposal.

“In tune with Centre's thought process and in accordance with its proposed policy, the state government will introduce the budget from January 1 to December 31.This was cleared by chief minister,“ a senior official in the finance department told TOI. Till date,

Madhya Pradesh

is the only state to have already made the shift to make the fiscal year run concurrent with the calendar. Along with Telangana, Gujarat and Maharashtra are also making similar moves. According to the sources, finance minister Eatela Rajender and Ramakrishna Rao will soon undertake a tour of Madhya Pradesh and study the system in place there. “A cost-benefit analysis of the new financial year will be prepared and the state government will appoint a ministers' committee to implement the proposal. A change in financial year would require amendments to statute and tax laws in the transition period.

Listing benefits of making such a change, finance officials point out that aligning the fiscal with the calendar year will help tune the annual budget with the farmers' income flows. The change will help companies in the state that have associated entities in overseas jurisdictions.

“Since most countries use the Gregorian calendar year (January to December) as their financial year, consolidating financial statements will be easier. Comparing the macro data with other countries will also be much simpler as many multi-lateral agencies such as the IMF and World Bank give projections for calendar year,“ said sources.

The state government is planning to implement the new accounting year from 2018-19 if the Centre grants necessary approvals for change in the statutory laws.

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