It's February, and a veil of secrecy has enveloped parts of North Block, a wing of government offices in central Delhi that houses India's finance ministry.
These days, the block, usually teeming with journalists, is strictly off limits to them.
Countdown to India's budget day –Parliament's single most important calendar event – is on. As usual, this year it falls on Feb. 28. Last year, it was on March 16, a couple of weeks later than usual owing to then ongoing state elections in parts of the country.
This time around, the stakes are especially high, as this is the government's last chance to kick-start growth ahead of general elections next year. And there's a lot of work to do: the budget will need to address a slowing economy and try to rein in widening fiscal and current account deficits.
Finance Minister P. Chidambaram has already taken steps in the right direction, recently lifting caps on foreign direct investment, raising prices of subsidized diesel and import duties on gold, and cutting public expenditure. This will be the eighth budget in his career but the first in his latest stint as finance minister, which began in the summer.
In 1997, some economists credited him for delivering a "dream budget" outlining a roadmap for economic reforms, including lowering income tax and corporate tax rates.
The question is whether this can be repeated. It will be easy to outdo last year's budget, which economists found disappointing. It failed to take bold measures to encourage investment, or to contain India's widening budget deficit. Instead, it spooked investors through tax reforms including a proposal to tax overseas deals involving Indian assets retroactively – a measure that is currently being reviewed.
We are unlikely to find out until this year's budget is officially unveiled later this month. Ahead of the budget's release, extreme measures are taken to prevent leaks.
Work on the budget typically starts in September, and "by early-November, the first steps towards enforcing secrecy are taken," a former senior official at the finance ministry, told India Real Time. "Internet connections in the offices of senior officers and staff involved in the process are shut-down," he said, comparing North Block during the budget preparation to a "operations room during a war."
Then, three weeks before the budget is presented, "60 to 70 volunteers are taken down to the basement of the North Block, which houses two printing presses, and confined there with no contact with the outside world till the whole exercise is over," he added. These people are involved in printing, proof reading and translation.
A single phone is made available to them on which they can only receive calls, and that too, in the presence of an intelligence official, he said, adding that more than 95% of the group volunteer every year.
Senior ministry officials though can keep their normal routine, the official said.
Ceilings on expenditure for most ministries are fixed by the third week of December. By this time, the finance ministry completes assessments of revenue and market borrowings, and the first draft of the budget sees the light.
By the first week of January, estimates of tax revenue come in and by the end of the month, estimates of major subsidies and defense expenditure are finalized. Discussions on taxes – corporate, sector-specific and personal – start in January and the proposals are completed at the 11th hour.
The Finance Minister's budget speech is finalized just a couple of days before the presentation of the Budget, the official said.
This year, the budget session of Parliament is from Feb. 21 to May 10, with a month's break in between – from March 23 to April 21. A finance ministry official declined to comment.
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