A government-appointed committee headed by former chief economic adviser Shankar Acharya has suggested a shift from the British era system of following an April to March financial year to a January-December financial year.
The committee's recommendation, submitted to the finance ministry this week, is in tune with the proposal of government think-tank NITI Aayog's suggestion to position the financial year with the calendar year.
The committee was set up in July this year to look into the pros and cons of a shift in the financial year.
According to the committee, a change in the accounting period will align the fiscal with the monsoon cycle and the country's agricultural harvests.
''We have submitted our report. We have studied at length the feasibility and desirability of changing the financial year,'' Acharya said.
The committee weighed calendar options such as Samvat followed by the stock markets and the farm harvest that begins from July before it settled for the January to December financial cycle.
Besides the factors like the winter rabi and summer kharif crop periods, the committee noted that more than 156 countries and several multinational companies follow the calendar year as the accounting period.
Besides Acharya, an Oxford- and Harvard-educated economist, the panel included former cabinet secretary KM Chandrasekhar, former Tamil Nadu finance secretary PV Rajaraman, and Rajiv Kumar, senior fellow with the Centre for Policy Research.
Several experts also supported the move as agriculture contributes more than 15 per cent to India's GDP and above 58 per cent rural households depend on farm yields.
Some others pointed to the difficulties associated with adoption of these recommendations by the government, which would mean yet another change in the date when the budget will be presented.
It would also call for reworking of Parliament sessions, along with changes in data collection and working of state governments.
Chartered accountants point out that the change will not impact the common man. The taxation period will just change from the current April to March cycle to a new 12-month period.