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February 23, 2000

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The Rediff Pre-budget Special/Suhasini Haidar

Top secret: Budget 2000 gets record security cover

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Speculation about what the "millennium budget" may contain is rife in newspapers and seminars. Stock prices soar and plummet based on rumours about what the budget may or may not contain. Infotech stocks, for example, have been steadily increasing for the past month, due in some measure to the fact that this budget is expected to announce several IT-friendly measures.

To avoid large-scale speculation arising out of any possible leaks on the budget, the Ministry of Finance has to control its 'budget security' very tightly every year. "The smallest detail of the budget, if leaked, can make you a large amount of money," says an MoF official. "And we live in constant fear of a leak before the budget is presented."

A former finance secretary, however, sees budget secrecy as a slightly redundant leftover from the British parliamentary system. " The finance minister has to present his budget to Parliament," he says. "And receive their approval to tax the people according to his proposal. So if any detail of that proposal comes out, it is seen as a breach of parliamentary privilege. But in actual terms, it is not so easy to benefit from any information that you think is going to be in the budget."

Budget-secrecy has obviously always been a concern, even in British history. Labour chancellor Hugh Dalton was asked to resign because he told an inquisitive reporter that he had "better enjoy his cigarette while it lasted", just before presenting a budget that imposed severe taxes on the tobacco industry!

Budget planning goes on throughout the year, but specific work on the year's budget starts sometime in the middle of January. From then on to the last day of February, it is a process that involves only a few select people: The finance minister, finance secretary (Piyush Mankad), secretaries to the ministry of finance (revenue secretary, expenditure secretary and economic affairs secretary), and the joint secretary (budget).

During these two months, security at North Block which houses the MoF is doubled. Policemen are posted outside every office involved in the budget preparation to ensure that unauthorised people do not sneak in and out.

Before finalising their budget policies, the MoF officials usually consult representatives of every industrial sector and region of the country.

To begin with, the "core group" meets with industrial groups -- the insurance sector, the textile sector and so on. This year, for the first time, the core group even met representatives of the "entertainment industry" -- film-makers and movie distributors to understand their concerns. Next, the MoF officials meet chief ministers and other state representatives to decide on budgetary allocations.

As policies are formulated, budget security grows more and more. The prime minister is updated from time to time, but according to a source, even he is subject to security. Although he is shown all the budget details on a piece of paper, at the end of each meeting, MoF officials actually take away that piece of paper!

Modern technology has also meant that security has to be further tightened. Two years ago, when Reliance representative in Delhi, V Balasubramanian, was arrested for his connections with Romesh Sharma (who was arrested for his connections with Dawood Ibrahim), the raid conducted at his house unearthed several floppy disks containing budget papers! They were rumoured to have been e-mailed to Balasubramanian by an MoF official.

This year, the ministry is taking no chances -- the e-mail connections of all the top officers were temporarily disconnected last week, until after the budget is presented.

Sometime this week, the budget will be printed. The printing of all the budget papers is carried out in the basement of the North Block itself, under a thick shroud of security. In fact, all the employees and printing press workers involved are locked into the press until the 29th of February, when the budget is made public. For a week, they will live there, work there, without any access to a telephone or any communication with the outside world!

Finally, the day before the budget is presented, select members of the media (usually Doordarshan and All India Radio; this year, they may be joined by NDTV/Star News' Prannoy Roy) can have a look at the budget, provided they are willing to be "locked-in" for the night, only to be released after the Finance Minister has presented his budget.

Even the members of the Cabinet are not privy to the new budget through the period of its writing: the proposals of the new budget are revealed to the Cabinet only half-an-hour before it is put before Parliament.

After it is vetted by the Cabinet, Finance Minister Yashwant Sinha will present the budget (this government's third budget) to Parliament for its consideration and approval. And presumably, all his finance ministry officials and people involved in maintaining the secrecy of the budget can breathe a huge sigh of relief!

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