They’ve been sequestered for nearly two weeks in the basement of the red sandstone building that houses the finance ministry in New Delhi ? 40 to 50 section officers, press workers, law ministry officials and anyone else who has an inkling of what the coming Budget contains, with the exception of the ministry’s senior functionaries. Food is brought in from outside. The officials have been eating in a shamiana-covered area in the basement and sleeping there too. The expenditure and revenue Budget documents would have been printed by now at the finance ministry’s in-house printing press, but finance minister P. Chidambaram’s Budget speech would have gone for printing as recently as Thursday or Friday. So the men who’ve been quarantined will have to wait till Tuesday, after Chidambaram starts presenting the Budget in Parliament, for freedom to dawn.

This, of course, is but one of the more bizarre facets of the run up to the government’s presentation of its most important annual financial statement ? the obsessive security and secrecy, which begins months ago.

In late November or December, the home ministry orders the Intelligence Bureau (IB) to vet the backgrounds of finance ministry officials who are involved in the Budget. “The IB is called upon to check physical security with respect to premises, personnel and communication channels during Budget making and to implement anti-leakage measures,” says a former IB official. “These days, however, electronic security has been added to that list, since a lot of the work now gets done electronically. Phones and Internet connections are tapped. Any leak to the media is followed up in order to determine its source.”

The IB also monitors the movement of people in the internal passage that connects the finance ministry and the home ministry in North Block. With the IB office itself shielding another side of the finance ministry, entry and exit to the finance ministry is restricted to its front entrance.

Intelligence men hand out a list of dos and don’ts to the finance ministry. Budget work is distributed among advisors and additional secretaries who in turn distribute it among several joint secretaries, so that no one individual has a comprehensive idea about what the Budget will contain. “The joint secretaries don’t know the nitty gritty of the Budget,” says PHD Chamber of Commerce secretary general Bibek Debroy, who put in a spell at the finance ministry in the 1990s. Senior finance ministry mandarins tramp through the corridors of North Block delivering sealed files personally. “The finance, revenue and expenditure secretaries take a lot of papers to the finance minister,” notes one observer who’s been associated with the Budget making process. Adds the IB official: “Finance ministry files meant for the Prime Minister’s office are hand delivered by a few people in the ministry and the IB keeps a tab on them, besides tracking the passage of files.”

Yet one question begs an answer ? is such secrecy required? “That’s a question I’ve asked myself,” confesses a former senior bureaucrat. Certainly, the expenditure side of the Budget (the money that the government plans on spending next year) need not be secret. The case for maintaining Budget secrecy rests on tax rate changes ? if businessmen come to know in advance, for example, that the excise duty on, say, steel will rise, they’ll buy steel at pre-Budget prices, stock up on it and make a killing later by selling it at higher post-Budget prices. “The basic argument for secrecy is the arbitrage opportunities that arise if tax rate changes are known in advance,” observes a senior Planning Commission official.

But if you’re not changing tax rates, you don’t need secrecy,” notes former Reserve Bank of India governor Bimal Jalan. India is perhaps the only country in the world that alters tax rates every year, adds Jalan, a former finance secretary and chief economic advisor to the government. If the government spells out what tax rates will be in the next few years, the secrecy that shrouds the Budget will be redundant.

In the 1980s, the V.P. Singh government attempted to do just this by presenting a long term fiscal policy. And when he was finance minister, Yashwant Sinha moved to make the Budget making process more transparent. “Yashwant Sinha gave a time path on excise and customs duty rates, not on income tax rates,” says the Planning Commission official. So excise and customs duty rates were categorised into first five and then four slabs, and the public broadly knew what the rates would be in the next two or three years.

Says Amit Mitra, secretary general of Federation of Indian Chambers of Commerce and Industry: “Knowing the broad parameters of taxation is very helpful for planning business excellence.” Sinha was in jail in Hazaribad last week for leading a protest and so was unavailable for comment, but he had spoken to the media about steadily doing away with the secrecy of the Budget.

To be sure, the Fiscal Responsibility & Budget Management Act does require the government to present a mid-term fiscal policy to Parliament. The government has done so, but the policy deals with fiscal targets (what the fiscal deficit, for instance, will be in future years), not tax rates.

Jalan makes an additional point. Successive governments had laid out a broad path for import tariff cuts, in line with India’s commitments to the World Trade Organisation ? and the country didn’t collapse.

What is more, eliminating secrecy would have another fallout. The huge media hype about the Budget would fade away. Discussion on the US Budget, for instance, is muted and dwell on the Budget deficit and changes in policy directions rather than tax rates.

Some economists, however, argue that even if tax rates were spelled out in advance, it would still be impossible to eliminate Budget secrecy altogether. That’s because the Indian tax system is too complicated ? the tax system has hundreds of exemptions. “The taxwallahs have a ball,” chuckles the Planning Commission official. “Get rid of the exemptions or have exemptions that are based on clear principles and we can have transparency,” he adds.

So till then, finance ministry men will be sequestered at Budget time, their phones will be tapped and they’ll be trailed by IB men.