The Reserve Bank of India (RBI) board on February 15, 2020 recommended aligning the financial year of the central bank (July-June) with that of the government’s fiscal year (April-March) starting in 2020-21.
The proposal for this move was moved at the 582nd meeting of RBI’s central board of directors in New Delhi.
Objective/Reasons
- The objective behind this move is to arrive at better estimates of projected surplus transfers to the government for the purpose of budgeting.
- This decision is also in sync with recommendations of a committee headed by former central bank governor Bimal Jalan.
- Historically, the July-June year would have been linked to the agricultural seasons, which is not a consideration in these times.
- The transition to the April-March year would also bring about “better cohesiveness” in monetary policy projections.
