Colonial Financial Year

The financial year commences in Britain on April 1st, presumably since winter ends and the working spring season commences. Our rulers introduced the same financial year in India. We have stuck to it after independence.

Indian political thinkers such as Shukaracharya and Chanayaka proposed the financial year from Diwali. Even today, traditional financiers open new books of account on Diwali.

It will be best to institute the financial year from 1st October. Agriculture production depends to a great extent on the status of the monsoon. By September, the finance minister can have a fairly good idea of the expected agricultural production and mould the budget accordingly. The working season will not get broken by the financial year facilitating efficient public management. Will the finance minister appreciate this simple logic and change the financial year to suit our environment?

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