Acharya, former chief economic advisor–to look at the feasibility of changing the financial year, according to a statement by the ministry to the Lok Sabha (lower house of Parliament) on December 16, 2016. The committee will submit its report to the government on December 31, 2016.

The most prominent attempt to change the financial year was made in 1984 by a committee headed by LK Jha, former Governor of the Reserve Bank of India. The most serious recommendations to change the financial year came in the years preceded by deficient rainfall. The Jha committee was formed after droughts in 1979-80 and 1982-83.

Deficit rains in 2014 and 2015 gave further impetus to attempts to change the financial year, the main argument being that the government had, in those years, alreadymade its financial plans and had to redo them when additional money was required to address the effects of deficit monsoons, in a country where over 58% of rural households still depend on agriculture.

India still a rain-dependent economy

Sowing and cultivation in India occurs primarily during the south-west (kharif crops) and north-east (rabi crops) monsoons, with primary watering provided by the south-west monsoons between June and September.

Kharif crops, such as rice and pulses, and rabi crops, such as wheat, determine both food security and exports (India is the world’s largest exporter of rice).

“Any financial year, no matter when it begins or ends, will be affected by the behaviour of the south-west monsoon in the preceding financial year, as well as the one which falls within the financial year itself,”