Before the year 1582, Hindu Solar New Year day or Punjabi Baisakhi day or Tamil New Year day or Malayalam Vishu day or Bengali New Year day used to fall on 1st April. This is an important day for the Hindus and they celebrated this day as the day of harvests.
400 years before India was the World Trade Center. Bharat’s share in world trade was 23%, that of Britain was 2% and US was a mere 0.2%. Bharat’s wealth attracted most nations of the world. England formed British East India Company in 1600 AD to get a large slice of India’s trade. Dutch East India Company in 1602 and French East India Company in 1664 were subsequently formed with the same intentions. When British East India Company landed in Kerala, Tamilnadu and Bengal they saw that the Hindus celebrated their New Year day or Vishu or Vaisakhi on 1st April with gay abandon. Hence the British also adopted April 1st as the beginning of New Year for their commercial activities.
These are the reasons why financial year starts in April in India.
1. India was ruled by British for around 150 years, Who followed the accounting period of April to march after the adoption of Georgian System Of Accounting Calendar.
2. Harvesting season starts in April. Being an agriculture country, Money starts flowing in the hands of agriculture and related marketers only in April.
3. Almost in all parts of India, Regional New Year falls in 13th to 14th April. That is why Govt. fixed 1st April as a New Financial Year.
4. One of the other reasons why Fiscal Year starts and end differs from the Calendar starts and end. (i.e Jan to Dec) is also to avoid “Year End Activities” Like Xmas, New Year celebrations etc. and to financial activities clash at the same time.
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