BHOPAL: Madhya Pradesh was the first to announce it would shift to a Jan-Dec fiscal in 2018 after Prime Minister Narendra Modi floated the idea in April this year. Now, the ambitious plan is put on the backburner, apparently because the finance department is too busy handling the fallout of GST and the slash in VAT on fuel.
“We have been studying the tax format and it seems that the state budget will be presented as per the April-March financial year. There was an idea to change the fiscal year cycle from April-March to January-December but this doesn’t seem to be happening from this financial year,” state finance minister Jayant Malaiya told TOI on Monday.
PM Modi had talked about changing the financial year cycle at a governing council meeting of NITI Aayog with representatives from all states in April 2017. He had asked states to take the lead, and MP was quick to announce it would lead the change. In May, the state cabinet, at a meeting chaired by chief minister Shivraj Singh Chouhan, announced that the budget session of the state assembly would be held in December this year so that budgetary exercise can be done before year-end. After the budget session of assembly, the CM reiterated that the government plans to present the state budget in December. Now, it’s been put on hold.
“Madhya Pradesh was the first to announce a shift to January-December fiscal emphasising that state’s current financial year would end in November. But after the GST rollout, the government had to plan for SGST and VAT, which proved out a major disruption for the finance department”, said Dr R S Tiwari financial expert. “The slash in VAT on petrol and diesel cost s loss of Rs 900 crore revenue to the state’s coffers in the very first week. This compelled the government to put on hold the shifting of financial cycle to January-December,” said a government official.
“The finance department has sought details from each department on establishment fund, interest payment, debt returns, pension, annuity and royalty payments by November 1 to take an early decision on budget allocation. Priority will be given to funds for MLAs, MPs and panchayats in view of the ensuing assembly elections slated for November 2018,” said an official.
At the next GST Council meet, scheduled in Guwahati on November 10, Malaiya is expected to put forth grievances of traders. Sources said that the council is likely to look into issues related to construction and infrastructure that need to be restructured.