Budget pot boiling: Will it be a sweet deal for taxpayer?


(Online Desk)

The final budget-making exercise kick-started on Monday saw finance minister Nirmala Sitharaman ladling out the traditional halwa for her staff out of a huge cast iron pot.

Will the end result for the taxpayer likely to be bitter or sweet?  Of course, it all depends on how the budget pot is stirred and which cesses are added or taken out.

Sitharaman will be looking for ways to reverse India’s slowdown which has seen unemployment at record levels, industry shrinking and the overall economy slowing down. Economic pundits want her to cut taxes for the middle class to boost consumer spending while at the same time increase expenditure on rural schemes and infrastructure building to increase employment and start a ‘virtuous cycle of economic activity.’

The ‘halwa ceremony’ marks the start of the period when about 100 officials involved in the final budget-making process are ‘locked in’. These officials and staff have to stay within the red-sandstone North Block to maintain the secrecy of the tax proposals they are working on. They can get back to the outside world only after the Budget is presented by the Union Finance Minister in Parliament.

Landline phones and mobiles of the officials locked in are monitored by intelligence agencies. Visitors are escorted by security personnel to the officer they visit. Sensitive sections including the central board of direct taxes, central board of indirect taxes, revenue department and budget divisions dealing with taxation policies, which form the heart of the budget-making exercise, are kept under strict armed vigil throughout this period.

Intelligence sleuths in plainclothes mentor their charges round the clock in one of the most elaborate yet least understood security exercises in the country. Cybersecurity and spyware ensure there is no cyber eavesdropping or leaks out of the building. While a powerful electronic jammer brought into play some years back ensures that mobile phones are not used to pass on sensitive information out of the corridors of the ministry, a small telephone exchange keeps an ear on sensitive landline phones.

Despite the government announcing a series of steps to revive the economy including slashing corporate taxes and announcing relief for sectors like automobiles and realty, the budget remains a critical security event.

“Corporate sleuths hunt for taxation changes, including customs duty changes … prior knowledge can mean thousands of crores in profit. For instance, if a coal importer brings in a million tonnes of coal ahead of a budget announcement to raise the duty on coal, he could make a killing. Or the knowledge that cigarettes would be taxed less could be used by a stock market punter to buy into tobacco stocks, fetching him millions in a post-budget rally,” said a top revenue department official.