Sweet N Sour: Splurging Public Money

31st March in India is the last day of a financial year and there is a huge rush on this day to exhaust the unspent money. A financial year in India starts on April 1 and ends on the March 31. As such no department wishes to carry over the unspent budgetary money to next year as it is considered as surrendered. In order to exhaust the budget, departments would buy expensive fixtures, furniture and even vehicles not urgently required. And surprisingly , the finance department- the custodian of public money- would easily give the permission.

While in govt service I often wondered why there used to be so much of rush to spend public money on extravaganza and how public would benefit from the extravaganza. The practice is still prevalent there though state govts are now cash-strapped. But the practice of splurging public money hasn't ended.

There is so much of rush for spending budget that state-run banks, particularity State Bank Of India, works till late night on 31st March. Banks remain closed on first April.

The April-March financial year is the inheritance from Colonial rule. India was under British control for over 150 years. Britain still follows the April - 31st March financial year. After the East India Company started to rule, they adopted the same financial system in India. Hence, financial year started from April to March in India also. After Independence, the Indian Govt didn't change this pattern. .

After Modi govt came to power, it changed the presentation of budget from last day of February to 1st of February but it didn't change the financial year.

It may be due to local factors. April coincided with the 'Hindu festival' of Vaisakha or the Hindu New Year. Hence, this may be one of the reasons why the government thought of starting the financial from April to March in India.

Moreover, India is an agricultural country and most of the sources of income depend primarily on crops. As such the income relies upon the estimation of the yields that are harvested in the period of February and March. Accordingly, these two months of span give government some idea whether the revenue is going to increase or decrease. Besides the main festivals in India like Navratri and Diwali fall in the month of October and November, followed by Christmas in December. During these time periods, the value of sales for the retailers and value buying's for the shoppers are heavy, which makes accounting time-consuming. These could also be the reasons why the financial year is taken from April to March.

Apart from India and Britain, Canada, New Zealand,Hong Kong and Japan also follow April 1- 31st March financial year.

But I wonder if the govt departments in Britain, Canada, New Zealand, Hong Kong and Japan also indulge in splurging the budget. We need to ban this practice especially when state financial resources are already under stress.

(Chander Sharma)