source Business standard
CS A Rengarajan
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Changing the financial year |
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Today, the government´s financial year, with the MP exception, is April 1 to March 31 of next year. (This is not in the Constitution, but flows from the General Clauses Act of 1897.) Note that private companies and business organisations don´t necessarily have to maintain accounts foraperiod identical with the government´s financial year. That isn´t the case today. It won´t be the case when government changes its financial year. India had its first Budget on April 7, 1860, and till 1867, the financial year used to be May 1 to April 30. There was only one reason for the 1867 change, aligning Indian government´s financial year with the British. In 1865, there wasaCommission of Enquiry into Indian Accounts with Foster (assistant paymaster general) and Whiffen (deputy accountant general) as members. They recommended the year from January 1. The secretary of state didn´t agree because of the alignment motive. We move to Royal Commission on Indian Finance and Currency (commonly referred to as “Chamberlain Commission”) appointed in 1913. This said: “It is clear in fact that from the financial point of view the present date is almost the most inconvenient possible for the budget, and the suggestion has therefore been made that the date of the beginning of the financial year should be altered from the 1st April to the 1st November or 1st January. There may be administrative difficulties in carrying this suggestion into effect, but financially, it would beagreat improvement.” PostIndependence, in 1958, there was the 20th Report of the Estimates Committee of Second Lok Sabha. Again, strong arguments against April 1, arguing in favour of October 1. We move to first Administrative Reforms Commission (1966) and its study team on financial administration. Strong arguments against April 1 again. After considering January 1 and October 1, and opting for October 1. The 4th Report on Finance, Accounts and Audit said, “The Financial Year starting from the 1st of April is not based on the customs and needs of our nation. Our economy is still predominantly agricultural and is dependent on the behaviour of the principal monsoon. Arealistic financial year should enableacorrect assessment of revenue, should also synchronise withamaximum continuous spell of the working season and facilitate an even spread of expenditure.” After an NDC meeting, in 198384, the Union finance minister brought up the issue again and asked for the views of state chief ministers. Almost all chief ministers who replied wantedachange, though they differed on which month should be chosen. Several chief ministers suggested after the monsoon, with knowledge of kharif output; many suggested synchronisation with the calendar year, others recommended July 1 for facilitating development works. This led to theLKJha Committee of 1984. This again recommended January 1. The chairman´s letter to the Union finance minister said, “It seemed to us that making JanuaryDecember the financial year would be the most advantageous from this point of view, as it would enable the Budget to be presented in November when the size of the kharif crop would be known, andapreview of the rabi crop would be possible. The choice would also be helpful in the compilation of statistical data for purposes of National Accounts, in line with international practice, and do away with the confusion caused by having to refer to the financial year for some purposes and the calendar year for others”. Ihave mentioned all this to demonstrate this isn´tanew issue. Among the reasons cited are (a) current financial year leads to suboptimal utilisation of the working season; (b) difference in agriculture crop period, statistics and data collection periods fromanational accounts perspective; (c) convenience of legislators; (d) international practices; (e) national culture/traditions. Even if agriculture´s share in the national income is declining, those other reasons remain valid, especially the one about working season. Talk to anyone from the Northeast, or other hilly states. The recommendation wasn´t implemented. The government´s response was: (a) advantages are minimal; (b) data collection is upset; and (c) it would require amendments to tax laws, financial procedures ad son on. On (c), the Jha Committee did ask the Central Statistics Office and the latter “supported the change to the calendar year which it feels is not likely to result in any major disruption. On the other hand, it may beaneater arrangement, especially since it would then make for more uniformity in the periods of the various statistical series.” On (c), the first Administrative Reforms Commission said: “We recognise that any change in the financial year would cause in the short run considerable dislocation in the administrative and statistical fields of activity. But that consideration should not deter us from adoptingamore rational, practical and convenient system, keeping in view the many advantages which will accrue therefrom.” Right now, there are ongoing changes in public expenditure and budgetary processes —end of Plan versus nonPlan distinction, 14th Finance Commission recommendations, restructured centrally sponsored schemes. This isagood time to bring in change, with arguments in its favour from 1865. In 1993, the deputy chairman of the Planning Commission wrote to the finance minister, asking why nothing had been done about the Jha Committee recommendations. The minister replied that the country was in the middle of reforms and this wasn´t the best of times. Stated thus, there isaperpetual worst of times. The writer isamember of the National Institution for Transforming India Aayog. The views are personal This is as goodatime as any to align with the calendar year. Otherwise, there isaperpetual worst of times BIBEK DEBROY ILLUSTRATION: BINAY SINHA |
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Limited claim for lost baggage |
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He checked inasuitcase weighing 15 kilograms (kgs). When the flight landed at Delhi, Nagpal could not find his suitcase. He lodgedacomplaint with the airline, which offeredacompensation of ~3,000. Nagpal did not accept the amount claiming that the suitcase contained clothes and other items worth ~42,673. He also contended that he was forced to purchase new clothes at an expense of ~25,000 which, too, should be reimbursed to him. As the airline refused to pay this amount, Manish filedacomplaint before the District Forum seekingatotal compensation of ~97,673. The airline contested the complaint, saying that its liability was limited under the “Carriage by Air Act”, and that it was liable to payamaximum amount of ~3,000. The Forum over ruled the airline´s contention and ordered it to pay ~42,673 towards the lost clothes and ~5,000 for the suitcase, totalling ~47,673. It also awarded 9 per cent interest. Additionally, ~10,000 was awarded as compensation for mental agony and ~2,000 as litigation costs. The airline challenged the order before the Chhatisgarh State Commission which dismissed its appeal. It then filedarevision petition. The National Commission observed that the dispute involvedaquestion of law as to whether the airline could restrict its liability in terms of the Carriage by Air Act. Also, whetheraconsumer forum could award compensation commensurate with the loss incurred, along with compensation for harassment and mental agony. The National Commission considered the provisions of Rules 22, 23 and 25 which were framed in accordance with the Warsaw Convention and the Hague Protocol. The rules provide that the liability ofacarrier for loss of registered baggage and cargo is limited to 250 francs per kg of loss. The Commission relied onaprecedent whereafivemember bench, in The Manager, Air India vs Ms India Everbright Shipping &Trading Company in First Appeal No 451 of 1994 decided on April 20, 2001, had observed that the Consumer Protection Act was an additional remedy which would not be in derogation of any other law. Since the liability of the airline is limited by the Carriage of Air Act, the consumer fora cannot award compensation in excess of the prescribed limit. The Commission noted that the Government of India had issued notification March 30, 1973, under which 250 francs per kilogram has been substituted with ~125 per kilogram. The Commission concluded that the airline was justified in limiting the claim for the lost baggage and that Nagpal was not entitled to any amount in excess of ~3,000. Since the airline had made the offer even prior to the filing of the consumer complaint, the Commission held that Nagpal would not be entitled to the litigation cost. Accordingly, by its order of April 25, 2017 delivered by JusticeVKJain, the National Commission allowed the airline´s revision and dismissed the complaint. However, it observed that the amount of ~3,000 which had been offered should be paid. The author isaconsumer activist An airline is liable to payacompensation of ~125akg if it loses your luggage, under the Carriage by Air Act CONSUMER PROTECTION JEHANGIRBGAI |
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