NEW DELHI: The Congress today said that the Union Budget has failed to address the key economic challenges facing the country.
Accompanied by Congress General Secretary (Communications) Jairam Ramesh and Research and Monitoring In-charge (Communications Department) Amitabh Dubey, Chidambaram said the Union Budget and the Finance Minister’s speech failed to address India’s key economic challenges and did not demonstrate economic strategy or statesmanship.
“Our verdict is that the Budget speech and the Budget fail the test of economic strategy and economic statesmanship,” Chidambaram noted while adding that the speech ignored the major concerns highlighted in the Economic Survey 2025-26, raising doubts whether the government had even considered its findings.
Chidambaram said none of the serious issues confronting the economy—such as trade stress from US penal tariffs, widening trade deficit with China, weak private investment, uncertain FDI inflows, persistent FPI outflows, slow fiscal consolidation, inflation felt by households, closure of lakhs of MSMEs, rising youth unemployment and deteriorating urban infrastructure—were addressed in the Finance Minister’s speech.
Calling the response in Parliament “perfunctory”, Chidambaram said the lack of substance led many to tune out of the speech, adding that the Sansad TV telecast switched off a few times.
Criticising fiscal management in 2025-26, he said revenue receipts fell short by Rs 78,086 crore and total expenditure by Rs 1,00,503 crore, while capital expenditure was cut by Rs 1,44,376 crore, including Rs 25,335 crore by the Centre and Rs 1,19,041 crore in the states.
He noted that the Centre’s capital expenditure declined from 3.2 per cent of GDP in 2024-25 to 3.1 per cent in 2025-26, without any explanation in the speech.
Chidambaram said cuts in revenue expenditure disproportionately hit sectors affecting ordinary citizens, including Rural Development (Rs 53,067 crore), Urban Development (Rs 39,573 crore), Social Welfare (Rs 9,999 crore), Agriculture (Rs 6,985 crore), Education (Rs 6,701 crore) and Health (Rs 3,686 crore).
He highlighted a sharp reduction in allocation for the Jal Jeevan Mission from Rs 67,000 crore to Rs 17,000 crore in revised estimates, questioning the credibility of its restoration to Rs 67,670 crore in 2026-27.
On fiscal consolidation, Chidambaram said adherence to a 4.4 per cent fiscal deficit in revised estimates and a marginal 0.1 percentage point reduction projected for 2026-27 did not reflect bold fiscal prudence, with the revenue deficit continuing at 1.5 per cent of GDP.
He further criticised the proliferation of schemes, missions, initiatives and committees announced in the speech, saying he counted at least 24 new entities, many of which were likely to disappear by next year.
Commenting on tax proposals, Chidambaram said the Finance Minister had tinkered with rates months after the passage of the Income Tax Act, 2026, even as most citizens remained unaffected by income tax changes. He welcomed limited relief on indirect taxes, noting these were the only provisions of relevance to the average citizen.
