Senior Congress leader P Chidambaram on Sunday said the Union Budget presented by Finance Minister Nirmala Sitharaman in Parliament earlier in the day “failed the test of economic strategy and economic statesmanship.”
Survey Allegedly Ignored
Addressing a press conference here, Chidambaram, a former Finance Minister, said he is not sure if the Finance Minister and the government read the Economic Survey 2025-26 and even if they have, they have decided to discard the challenged and fall back on “their favourite pastime of throwing words at the people”.
Economists Left Astonished
Every pre-budget commentator and writer, and every student of economics, must be astonished by what he or she heard in the Finance Minister’s speech to Parliament today, Chidambaram said.
No Coherent Narrative
“I accept that a Budget is more than a statement of annual revenues and expenditure. In current circumstances, the Budget speech must lay out a narrative that addresses the major challenges outlined in the Economic Survey released a few days ago. I am not sure if the government and the Finance Minister had read the Economic Survey 2025-26. If they had, it appears they have decided to discard it completely, and fall back on their favourite pastime of throwing words–usually acronyms–at the people,” he added.
Multiple Economic Challenges
Chidambaram said he can count at least 10 challenges identified by the Economic Survey and many knowledgeable experts.
Trade And Investment Stress
“The penal tariffs imposed by the United States have created stress for manufacturers, especially exporters; protracted trade conflicts that will weigh on investment; the growing trade deficit, especially with China; the low Gross Fixed Capital Formation (approx. 30 per cent) and the reluctance of the private sector to invest; the uncertain outlook for the flow of FDI (foreign direct investment) into India and the persistent outflow of FPI for the last several months,” he said.
Weak Fiscal Consolidation
The Congress leader said that after the months-long exercise, the revised estimate of the fiscal deficit has adhered to the budget estimate of 4.4 per cent, and the projection for 2026-27 is that the fiscal deficit will fall by a meagre 0.1 per cent of GDP.
Not A Bold Exercise
He said the revenue deficit will remain at 1.5 per cent and noted that “it is certainly not a bold exercise in fiscal prudence and consolidation”.
Proliferation Of Schemes
The Congress leader said the Finance Minister is not tired of adding to the number of schemes, programmes, missions, institutes, initiatives, funds, committees, hubs, etc. “I counted at least 24. I leave it to your imagination how many of these will be forgotten and vanish by next year,” Chidambaram said.
Limited Tax Impact
He said months after the passing of the Income Tax Act, 2026, which will come into force on 1 April, 2026, the Finance Minister has tinkered with some rates.
Final Verdict On Budget
“While the impact of the numerous minor changes has to be examined carefully, it must be remembered that the overwhelming majority of the people have no concern with income tax or income tax rates. As far as indirect taxes are concerned, the average person will be concerned with only paragraphs 159, 160 and 161 of the speech. I welcome these minor concessions. Our verdict is that the Budget speech and the Budget fail the test of economic strategy and economic statesmanship,” he added.
