Senior Congress leader and former Union Finance Minister P. Chidambaram has delivered a scathing verdict on the Union Budget 2026-27, stating that it has “failed the test of economic strategy and economic statesmanship.” His remarks come hours after the budget was presented in Parliament by Finance Minister Nirmala Sitharaman.
“Astonishment, Not Assurance” — Chidambaram’s Opening Attack
Addressing a press conference in New Delhi, P. Chidambaram said the finance minister’s budget speech left economists, analysts, and students of economics astonished rather than reassured. He questioned whether the government had even read the Economic Survey 2025-26, which was released just days before the budget.
According to Chidambaram, even if the survey had been read, the government appeared to have completely discarded its findings, choosing instead what he described as a familiar strategy of “throwing words—usually acronyms—at the people.”
Economic Survey Ignored, Challenges Unanswered
Chidambaram stressed that in the current economic climate, a budget speech must present a clear narrative addressing the major challenges identified in the Economic Survey. He said the finance minister’s speech failed on that fundamental requirement.
He listed at least 10 major economic challenges flagged by the survey and by independent experts, none of which, he said, were meaningfully addressed:
Penal tariffs imposed by the United States, creating stress for Indian manufacturers and exporters
Protracted global trade conflicts, weighing heavily on future investment
Rising trade deficit, especially with China
Low Gross Fixed Capital Formation, stuck at around 30 percent
Reluctance of the private sector to invest
Uncertain outlook for Foreign Direct Investment (FDI)
Persistent outflow of Foreign Portfolio Investment (FPI) over several months
Slow pace of fiscal consolidation and continued high fiscal and revenue deficits, contrary to FRBM norms
Mismatch between official inflation numbers and household realities, including costs of education, healthcare, transport, and daily essentials
Closure of lakhs of MSMEs, survival struggles of remaining units, rising youth unemployment, rapid urbanisation, and deteriorating urban infrastructure
Chidambaram said not a single one of these challenges was addressed in the finance minister’s speech.
“Even by an Accountant’s Standards”
Taking aim at the fiscal performance of 2025-26, Chidambaram said the budget failed even on basic financial management metrics.
He pointed out that
Revenue receipts were short by Rs 78,086 crore
Total expenditure was short by Rs 1,00,503 crore
Revenue expenditure fell short by Rs 75,168 crore
Capital expenditure was cut by Rs 1,44,376 crore
Centre: Rs 25,335 crore
States: Rs 1,19,041 crore
“Not a word was said to explain this miserable performance,” he said, adding that the center’s capital expenditure declined from 3.2 percent of GDP in 2024-25 to 3.1 percent in 2025-26.
Cuts Hurt the Common People Most
Chidambaram argued that expenditure cuts have disproportionately impacted heads that directly concern ordinary citizens.
Citing key examples, he said spending on the Jal Jeevan Mission was “cruelly cut” from Rs 67,000 crore to just Rs 17,000 crore, undermining access to safe drinking water — a basic necessity.
According to him, such reductions contradict the government’s claims of prioritizing welfare and inclusive development.
Fiscal Deficit: “Not a Bold Exercise”
The former finance minister said that after months of preparation, the revised estimate of the fiscal deficit merely adhered to the earlier budget estimate of 4.4 percent of GDP. For 2026-27, the projection shows a reduction of only 0.1 percent.
He noted that the revenue deficit remains at 1.5 percent, calling it “certainly not a bold exercise in fiscal prudence and consolidation.”
Schemes, Acronyms, and Vanishing Promises
Chidambaram also criticized the government’s tendency to announce multiple schemes, missions, initiatives, funds, hubs, and committees without clarity on outcomes.
“I counted at least 24,” he said, adding that it is left to public imagination how many of these would vanish by next year without trace or impact.
Tax Changes: Limited Relief, Limited Reach
Referring to the Income Tax Act, 2026, which comes into force on 1 April 2026, Chidambaram said the finance minister has once again tinkered with rates.
While he welcomed minor concessions in indirect taxes, he emphasized that the overwhelming majority of Indians are unaffected by income tax changes. For most people, he said, only a few paragraphs of the budget speech related to indirect taxes would matter.
Final Verdict: Strategy and Statesmanship Missing
Summing up the Congress party’s position, Chidambaram said that while small concessions are welcome, they do not compensate for the absence of a coherent economic strategy.
“Our verdict is that the budget speech and the budget fail the test of economic strategy and economic statesmanship,” he concluded.
