Amidst the havoc of COVID-19 and sudden spike in the number of infected cases, the Reserve Bank of India (RBI) has reportedly announced that the current fiscal year, i.e. 2019-20 will end on June 30, 2020, instead of March 31, 2020.
In India normally a financial year starts from April 1 and ends on March 31; however, RBI has decided to align its fiscal year with the Government.
The coronavirus has disrupted almost all the financial transaction around the world and India is one among the victim of deadly COVID-19. It is reported, because of a rise in demand for the extension of the fiscal year, from various sections such a decision was taken.
The central board of the RBI, last month, in its meeting in New Delhi, decided that the fiscal year 2019-20 will end on June 30, 2020. On the other hand budgetary year for 2020-21 will begin on July 1, 2020, but ends on March 31, 2021. However, all fiscal year thereafter will start on April 1 every year.
Currently, both – the RBI and the Government – follow the ‘T plus one’ system, which means the financial year spreads over two successive years. Nonetheless, there is one fundamental difference. The financial year for the Government begins on April 1 in ‘T’ (first year) and ends on March 31 in ‘T+1’ (second year). The financial year for the RBI, though, starts on July 1 in the first year and ends on June 30 in the next year.
The alignment with the Government will alter the way the RBI does bookkeeping. Plus, it may not need them to announce the interim dividend.
Meanwhile, the death toll in the country rose to 10 with a jump in the infected cases, which now stands at 511.