New Delhi: Former Finance Minister and Congress leader P. Chidambaram has expressed his views on the Union Budget 2026-27, describing it as falling short of public expectations. He remarked that commentators, writers, and students of economics must have been taken aback while listening to the Finance Minister’s speech in Parliament.
Chidambaram stated, “I believe a budget is not just an annual statement of revenue and expenditure. In the present circumstances, the budget speech should have presented a clear perspective on the major challenges highlighted in the Economic Survey 2025-26 released a few days ago. I doubt whether the Government or the Finance Minister has even read the Economic Survey. If they have, it seems they have decided to completely disregard it and instead returned to their usual habit of showering words on the people.”
He identified at least ten challenges that the Economic Survey and experts have pointed out, which the budget failed to address. These include punitive tariffs imposed by the United States affecting manufacturers and exporters; long-standing trade conflicts adding pressure on investments; rising trade deficits, especially with China; low levels of gross fixed capital formation at around 30 percent and hesitation in private sector investment.
Chidambaram also mentioned the uncertain outlook on foreign direct investment (FDI) inflows, ongoing foreign portfolio investment (FPI) outflows, slow fiscal consolidation with a persistently high fiscal and revenue deficit contrary to the Fiscal Responsibility and Budget Management (FRBM) targets, and official inflation figures impacting domestic consumption.
He highlighted the persistent gap between actual bills for education, health, and transport sectors and the allocated funds, the closure of millions of MSMEs struggling to survive, unstable employment conditions particularly among the youth, and deteriorating infrastructure amid growing urbanisation in municipalities and municipal corporations.
The Congress leader pointed out that none of these issues were addressed in the Finance Minister’s speech. From an accounting perspective, he said the fiscal management for 2025-26 was very poor. Revenue receipts were short by ₹78,086 crore, total expenditure was reduced by ₹1,00,503 crore, with revenue expenditure down by ₹75,168 crore and capital expenditure cut by ₹1,44,376 crore (₹25,335 crore by the Centre and ₹1,19,041 crore by the states). There was no explanation offered for this poor performance. The Centre’s capital expenditure fell from 3.2 percent of GDP in 2024-25 to 3.1 percent in 2025-26.
He added that significant cuts were made in important sectors and programmes, such as the well-publicised Jal Jeevan Mission, where spending was ruthlessly reduced from ₹67,000 crore to just ₹17,000 crore. The revised estimate for the fiscal deficit remained at 4.4 percent, matching the budget estimate, with a projected reduction to only 0.1 percent of GDP for 2026-27. The revenue deficit was steady at 1.5 percent, indicating no bold steps towards financial discipline and consolidation.
Chidambaram’s strongest criticism was aimed at the Finance Minister’s tendency to increase the number of schemes, programmes, missions, institutions, initiatives, funds, committees, and hubs, counting at least 24 new ones. He left it to the readers’ imagination how many of these will be forgotten or disappear by the next year.
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