The 2007-08 Union Budget has not generated much hype, even in the pink papers. Observers feel this is so because results of the elections held in three Indian states are being declared on February 27, just a day before the presentation of the Budget.
The Samjhauta Express bomb blasts have also sent the political establishment into a tizzy, including those who are giving the finishing touches to the Budget.
Finance Minister P Chidambaram is also being repeatedly called by the All India Congress Committee to give opinion on the way to go following UP Governor's recommendation for President's Rule in Uttar Pradesh and the time that this eats into is also slowing down the process of the preparation of the Union Budget. The required concentration is not there, say senior North Block officials.
Besides, it is also felt that Prime Minister Manmohan Singh has taken keen interest in the preparation of the Budget this year. The prime minister does not want to take any chances since this Budget is the one just before the general elections. There is also yet another school of thought that says that the coming Budget will be a populist one keeping the imminent UP elections in mind.
However, despite all the speculation, the Prime Minister's Office is keeping a tight lid on the forthcoming Budget proposals. The finance minister and his Budget team have had three rounds of discussions with Manmohan Singh. Both Dr Manmohan Singh and Chidambaram are also said to have had a special meeting with United Progressive Alliance chairperson Sonia Gandhi to seek her advice on the Budget. This meeting, however, was kept secret following the lesson learnt in 2005 when the media scooped the letter Manmohan Singh had written to Sonia Gandhi, who was then the NAC chairperson. Some of the Budget bits were made known by the media, leading to the Opposition parties bringing a privilege motion against the prime minister for leakage of Budget proposals. The NDA convenor George Fernandes said that the sacred secrecy of the Budget had been breached and that Chidambaram was directly answerable to the House on how Sonia Gandhi could be given details of the Budget even before he presented it in the Lok Sabha.
No wonder then that the upcoming Budget is being guarded like the gold in Fort Knox. High-tech tapping devices, an army of security personnel, sophisticated surveillance gadgetry, digital deterrents, electronic sweeping devices and jammers, huge scanners are all pressed into service to provide the tightest security in the Indian history to the Union Budget 2007-08.
In this electronic age, the Union finance ministry is taking no chances and ensuring that the contents of the Budget to be presented by Finance Minister P Chidambaram in Parliament are not leaked out before he begins to read his Budget speech at 11.00 a.m. on February 28.
Security agencies have set up a small telephone tapping exchange in North Block. The electronic contraption can intercept private mobile operators' cell numbers. Electronic sweeping devices, installed on either side of the corridors of the finance ministry section of the North Block, fortify the security further.
The mini 'intercepting exchange' will also keep a close eye on the 100-odd landline telephone numbers installed in the chambers of various bureaucrats.
The Intelligence Bureau has also blocked e-mail facilities to most of the computers in the offices of Union finance ministry.
The entrances of the finance ministry itself have been cocooned in an electronic umbrella. A huge steel frame, housing a special X-ray scanner fitted with computers, has been mounted at the gates to prevent anyone from taking anything unwelcome inside the North Block or, more importantly, smuggling anything out.
The finance ministry office, in the North Block of the Central Secretariat, is normally open round the year and you can easily walk in after obtaining a pass at the reception. No more. At least not till the finance minister presents his Budget proposals in Parliament.
Till then the hush-hush work on the Budget, as finishing touches are given to it, is going on in the depths of the North Block.
Heading the secret exercise of the Budget making is Ashok Kumar Jha, the Finance Secretary.
The prime minister and the finance minister every now and then interact with Jha, giving him new ideas and suggestions. Jha's job is to translate these ideas into facts and figures that go in the Budget Speech and Budget papers.
Interestingly, the National Common Minimum Programme (NCMP) has quietly been bid goodbye. No officer has referred to it during the Budget preparations. This was not the case in 2005 and 2006 when NCMP was consulted like the Gospel.
Apart from his many tasks, Parthasarathy Shome, Advisor to Chidambaram, is another officer who is coordinating and monitoring timetable of the printing of the Budget speech. Everyday at 8.30 a.m, before the government offices open, he is busy perusing a checklist on his table to ensure that everything goes ahead smoothly and meets the different deadlines set for different parts of the Budget.
For those who know that the enormous task of Budget preparation demands total commitment in terms of time and effort, it is quite perplexing to see the finance minister flying off to London.
Sources say Chidambaram is able to take it easy since he has found Parthasarathy Shome and KM Chandrasekhar who efficiently handle all these responsibilities.
And if for some reason Chidambaram is not available, KM Chandrasekhar has been asked to communicate to Saranyan Krishnan, an IAS officer of the Tamil Nadu cadre and Chidambaram's private secretary, whatever the finance minister needs to know. Chidambaram, who has full faith in Krishnan, knows his Budget will remain leak-proof.
At the request of Chidambaram, the PMO agreed to keep S Krishnan in Delhi up to mid-March, so that the Budget presentation would have been over.
Krishnan has since been appointed in November as technical assistant to Dr Adarsh Kishore, executive director, IMF, in Washington.
Krishnan is the son of K Saranyan, a retired IPS officer of the Andhra Pradesh cadre who was the security advisor to late prime minister P V Narasimha Rao. Krishnan's father-in-law is K P Geethakrishnan, former finance secretary.
Teams that make the Budget
There are two teams that are involved in the preparation of the Budget: one political, the other official.
The political team consists of:
- Manmohan Singh, Prime Minister;
- P Chidambaram, Finance Minister;
- Montek Singh Ahluwalia, Planning Commission Deputy Chairman; and
- C Rangarajan, Economic Advisory Council Chairman.
The official-level team includes:
- Ashok Jha, Finance Secretary;
- T K A Nair, Principal Secretary to the Prime Minister;
- Parthasarathy Shome the Advisor to Finance Minister;
- K M Chandrasekhar, Revenue Secretary;
- Dr Sanjiv Mishra, Expenditure Secretary;
- K Mohandas, Additional Secretary, Revenue;
- Mrs L M Vas, Joint Secretary (Budget), Department of Economic Affairs;
- S Krishnan, Private Secretary to Finance Minister;
- Rajiv Ratna Shah, member secretary, Planning Commission; and
- Arun Bhatnagar, member secretary of the National Advisory Council.
Secrecy
The level of secrecy that has been maintained to ensure that there is no Budget leakage is phenomenal, to say the least. A horde of the Intelligence Bureau sleuths have taken control of each and every movement and phone call of over a dozen officials in the ministry to ascertain that the Budget remains shrouded in secrecy till it is presented in Parliament.
Those who are being monitored include KM Chandrasekhar and Parthasarathy Shome, two executives in the Tax Research Unit (TRU) and five stenographers working on the computers delinked from the usual NIC hot link.
The IB surveillance scares those under its watchful eyes so much that they prefer not to speak to even their better halves and children lest they are accused of leaking out any Budget proposal.
Top secret
The most closely guarded secret is the timing of the printing of the finance minister's speech and the taxation proposals. Insiders say the ministry hands over the material for printing either on midnight of February 25 or early February 26 morning.
The Press Information Bureau officials admit that they are bundled into the printing press unit in the basement of the finance ministry on the night of February 25 to get cracking with the press releases to be put out on February 28. Old timers say that manual typewriters used to be placed in front of the printing press in the underground sections of the North Block till the mid-nineties. After the computer revolution, compact discs are sent to the press.
On the night when the data in the computer, to which nobody except the finance secretary has access, is transferred to CDs to send them for printing. IB, CBDT, and Central Board of Excise and Customs officials stand in front of the computer and sign the list of each file of the confidential papers that is copied on to the CDs.
Delhi Police protection is available to prevent any possible attack on the finance secretary as the exact Budget proposals are crucial and are known only to him.
IB everywhere
Every year around Budget time, IB asks Delhi Police to provide protection to the finance secretary. The IB chief is also in touch with him on a daily basis. An officer of the Joint Director rank supervises the IB network created at the Budget wing of the North Block. This officer keeps a close watch on the movements of junior or senior officials. Even the peons are under constant surveillance from the beginning of February.
A total of 24 officers of the rank of Deputy Superintendent of Police have moved to the North Block. It is a drill that is not known to many.
These officers split into four groups and report to the Joint Director (VX). Their prime duty is to keep a watch on a select group of 40-50 officers belonging to the Central Board of Direct Taxes (CBDT), the Central Board of Excise and Customs (CBEC) and others engaged in the Budget preparations.
Since 2004 onwards, a powerful electronic jammer has been installed inside the finance minister's chambers as well as at the entry of the finance ministry corridors. The IB, thus, ensures that all mobile phones are jammed and no information is passed out.
Printing
All government publications are printed at the government presses, but not the Union Budget. There is a special printing press in the basement of the North Block to print the Budget. A tight security blanket is spread during the second half of February. Technical heads of the printing press are not permitted to go out of the press from February 24 onwards when they will get the most secret part of the Budget -- personal taxation -- for printing. Already other parts of the Budget are being printed by then.
IB Director P C Haldar has made two secret and surprise visits to the printing press as he thinks he is equally responsible, along with the finance secretary, for ensuring the secrecy and sanctity of the Budget. He will be making at least five to ten visits, at different intervals, to the ministry to ensure that the IB sleuths posted there remain alert.
A mock exercise has been conducted in the past by sending an unknown person with fake papers inside the finance ministry at eleven in the night, just two days before the printing of the Budget. And if he is not nabbed by IB men or by finance ministry officials, the entire IB team is kept under suspension for two years. Such is the alertness with which the IB functions for a fortnight.
The printing press itself is housed in a huge space in the depths of the North Block. The area is fully air-conditioned. Dr S Narayan purchased special printing machines just for the Budget in the year 2000, when he was finance secretary, to modernise the Budget printing process.
Quarantined
It is not only the finance ministry officials who are virtually locked in to maintain the secrecy of the Budget, but officials of five other ministries are also quarantined.
Among them are senior legal experts on taxation matters from the law ministry who are given the responsibility of checking the text and wordings of the taxation Acts. There are five law officers who attend the Budget meetings.
The Press Information Bureau officials selected for preparing press notes on the Budget to be distributed to the media as soon as the Budget is presented to Parliament are also locked up inside the ministry building just before the printing of the taxation proposals begins.
The chairmen of CBDT and CBEC also visit the printing press just a day before the Budget presentation.
Presentation
The presentation of the Budget is in the following order:
- Key to Budget
- Budget Highlights
- Budget Speech
- Budget at a Glance
- Annual Financial Statement
- Finance Bill
- Memorandum
- Receipt Budget
- Expenditure Budget
- Customs & Central Excise
- Implementation of Budget Announcements
- The Macro Economic Framework Statement
- The Medium Term Fiscal Policy Statement
- The Fiscal Policy
- Strategy Statement
- The Statement under Section 7 of the FRBM Act
Significance
The Union Budget defines the nation's financial projections by the Union minister for finance for the forthcoming financial year and a financial review of the current fiscal year. However, Parliament finally decides the Budget.
The imposition of any central government taxes and distribution of government expenditure from public funds cannot be possible without an Act of Parliament, which examines and reviews all statements to ensure the proper dissemination of government expenditures.
Basically it is the Lok Sabha, the House of the People, whose approval is mandatory for the Budget to come into effect.
Proposals for taxation and expenditures can be initiated by the Council of Ministers, specifically the minister of finance. However, according to Article 112 of the Constitution of India, a statement of estimated receipts and expenditure of the Government of India has to be laid before Parliament in respect to every financial year.
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