New financial year: After MP, Telangana to move to a January-December cycle

The move is in line with the Centre's plan; current Apr-Mar cycle has been in practice since 1867

Telangana Chief Minister K Chandrasekhara Rao on Tuesday announced that his government was ready to adjust the state's financial year (FY) to a January-December cycle, instead of the current April-March one, in practice in India since 1867. The move would be in line with the Centre's plan.

Rao held a meeting with senior officials of the finance department regarding the matter.

Earlier this month, Madhya Pradesh Chief Minister Shivraj Singh Chouhan had announced that his government would adopt the new financial year cycle from next annual Budget in December this year.

Madhya Pradesh was the first state to announce the change after the proposal was mooted by Prime Minister Narendra Modi in the governing council meeting of NITI Aayog last month.

Last year, a committee appointed by the Centre had also favoured the change in FY cycle.

As Madhya Pradesh has been preparing for the annual budget presentation in December, Telangana CM has instructed his Finance Minister Etela Rajender and the finance department officials to visit the state to understand the steps needed for this transition.

In addition to adjusting its financial accounting and expenditure practices, a government will also need to change the existing statutes to move the FY to January-December cycle. One of the reasons cited for a change was the difficulties being faced in compiling the statistical data in relation to monsoons and agriculture income under the present April-March FY cycle.

N Chandrababu Naidu-led government in Andhra Pradesh is yet to take a decision in this regard even though it has no reservations on the change of FY cycle.

TDP government is of the view that once the Centre decides to switch to the new FY cycle, all the states will have to follow the suite because the FY forms the basis for release of grants and the share in Central taxes. Andhra officials believe that the Centre is likely to move to the January-December cycle from next year.

Though not an ally of BJP like Telugu Desam Party, Telangana Rashtra Samithi (TRS) government has been backing all the major decisions of PM Modi in the recent times.