Edit in JSFiddle

$(document).ready(function() {
   $('#txtDate').datepicker({
     changeMonth: true,
     changeYear: true,
     dateFormat: 'MM yy',
       
     onClose: function() {
        var iMonth = $("#ui-datepicker-div .ui-datepicker-month :selected").val();
        var iYear = $("#ui-datepicker-div .ui-datepicker-year :selected").val();
        $(this).datepicker('setDate', new Date(iYear, iMonth, 1));
     },
       
     beforeShow: function() {
       if ((selDate = $(this).val()).length > 0) 
       {
          iYear = selDate.substring(selDate.length - 4, selDate.length);
          iMonth = jQuery.inArray(selDate.substring(0, selDate.length - 5), $(this).datepicker('option', 'monthNames'));
          $(this).datepicker('option', 'defaultDate', new Date(iYear, iMonth, 1));
           $(this).datepicker('setDate', new Date(iYear, iMonth, 1));
       }
    }
  });
});

Select Date : <input type='text' id='txtDate' />