Prime Minister Narendra Modi last week indicated his backing for a January to December fiscal year. India currently follows the April to March financial year unlike most global countries where a January to December fiscal is the norm.
BestMediaInfo.com asked industry veterans on what they think about it and how it will benefit the industry. Most of them were positive and were of the opinion that it would be easy for them to manage their fiscal budgets and align with their global counterparts.
Explaining how things would ease out, Anand Bhadkamkar, CFO, DAN, South Asia, said, âMost of the agencies do budgeting from January to December. So if that happens, it will be a positive move. Dealing with international parts â managing spends will become much easier. Many of them are working on the January to December format. From the financial aspect, it is easier because we are talking about the same closing format. It will be easier for tracking client budgets from January to December.â
But Bhadkamkar thinks that it would not value add for a pure Indian business where all their clientele is local. He thinks that thereâs no negative in that and the outcome will only be positive and things will be aligned with international practices.
Madison Worldâs Chairman and Managing Director, Sam Balsara, too thinks it will be a good move. He said, âThe whole world generally looks at the financial year and do their planning accordingly. I think it wonât become a reality so quickly. I think the whole thing would take some time for the idea to take route.â
Tanmay Mohanty, Group CEO, Zenith India too syncs with Balsara. Zenithâs global network follows the January to December fiscal year and since March comes in the middle of the year, all budgets get on hold. Mohanty is positive if the move happens.
IPG Mediabrands too follows the January to December format globally and the April to March format in India. But their spokesperson was unavailable for a comment when the story was filed.
Debraj Tripathy, Managing Director, Mediacom, said that if this happens then things will be smooth for them. He said, âIt is a positive move. For companies like us who have global clients and whose parent companies are abroad and work on a January to December format, it actually helps us smoothen our work. The complications are less. Except for some administrative issues, I think it is a great idea.â
Currently, Mediacom tracks it clients on a monthly basis. They also set basic budgets for their clients. While the clientâs plans are done from April to March, Mediacom does the tracking from January to December and that is a complication for them now. Tripathy thinks that if this is implemented then the first year will have to be nine months â i.e. from April to December.
Udit Bhambri, Head, VML India said, âAs all industries will be impacted by the change, it shouldnât affect our industry in a bad way. All industries being aligned, marketing budget will be allocated by the end of the calendar year for the next year, which will also coincide with budget closing and predictions for our industry.â
Like Tripathy, Bhambri too thinks that there will be some challenges during the transition in the first year. âYet changing into this format will definitely help agencies like us which work within a global network. Being able to align our budget closing with the other global entities will actually make our financial lives much easier,â he said.