Why does the financial year start on 1st April?

Why does the financial year start on 1st April?

Why does the financial year start on 1st April? Know the reason.

Why does the financial year start on 1st April? Finance Minister Nirmala Sitharaman has opened her budget for the financial year 2025-26. The general budget will be implemented from April 1, 2025 to March 31, 2026. Have you ever wondered why the budget announced on February 1 starts from April 1? Then find out what is the reason behind this.

The Finance Minister has announced the budget for the year 2025-26. Nirmala Sitharaman’s economic package focuses on the middle class and agriculture. The budget will begin on April 1, 2025 and end on March 31, 2026. This is a schedule that generally coincides with the crop cycle in most parts of the country. Agriculture plays a vital role in the Indian economy and historically, India has been an agriculturally-dominated country.

The monsoon season in the country runs from June to September, which plays a major role in agriculture. Farmers usually sow crops in June-July and harvest them in October-March. In such a situation, it becomes easier for the government to plan for the agriculture sector by working according to this schedule.

Another reason for starting the financial year in India from April 1 is that the financial year in India also starts from Baisakh or the Hindu New Year. This explains the financial schedule from April to March. Many experts believe that the Indian government must have kept all these cultural traditions in mind while choosing this date. Starting the financial year with the Hindu New Year in India may also have been an intention to promote cultural unity.

The British have left their mark on many traditions in India. One of them is the financial budget. The British also played a big role in the beginning of the financial year from April. In fact, the first budget was presented in India during the British rule on 7 April 1860. Then it was from May to April. After that, the same system continued for seven years. In 1865, the British government set up a commission to examine the Indian accounts. However, for the first time, the commission recommended keeping the financial year from January 1 to December 31.

However, the British government was not ready for this, as the colonial government wanted to keep India’s fiscal year on the same line as Britain’s. So, ignoring the commission’s recommendations, the British changed India’s fiscal year in 1867. It was changed from April 1 to March 31.

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