Union Budget fails test of economic strategy, economic statesmanship: P Chidambaram

New Delhi: Congress leader and former Finance Minister P Chidambaram on Sunday said the Union Budget 2026-27 fails the test of economic strategy and economic statesmanship.

Addressing a press conference at the AICC headquarters here, he said the government and Finance Minister Nirmala Sitharaman seems to have completely discarded the Economic Survey and fallen back on their "favourite pastime of throwing acronyms at people".

Noting that the Union budget presented this year is not a bold exercise in fiscal prudence and consolidation, Chidambaram said the revenue deficit remain stationary at 1.5 per cent.

"There is nothing wrong with borrowing and spending. But the government should do fiscal consolidation quite rapidly and not as being done at the current rate," he noted.

Chidambaram said the government is currently providing an average of 50 days employment in a year under the rural employment scheme by spending around Rs 88,000 crore. He asked how it would fulfil the promise of providing 125 days of work under the VB-G RAM G (Viksit Bharat -- Guarantee for Rozgar and Ajeevika Mission Gramin) Act that replaces MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) by spending only Rs 95,000 crore under the scheme.

After the months-long exercise, Chidambaram said, the revised estimates of fiscal deficit has adhered to the budget estimates (4.4 per cent). The projection for 2026-27 is that the fiscal deficit will fall by a meagre 0.1 per cent of GDP.

The former finance minister said the Centre's capital expenditure has fallen as funds have been cut in crucial sectors and programmes concerning the common people.

"Where does this budget create jobs and tell young people about jobs?" he asked.

Chidambaram listed at least 10 challenges identified by the Economic Survey and many knowledgeable experts that the current budget has not addressed.

These include the penal tariffs imposed by the United States that have created stress for manufacturers, especially exporters, and protracted trade conflicts that will weigh on investment.

He said the growing trade deficit, especially that with China, the low Gross Fixed Capital Formation (approximately 30 per cent) and the reluctance of the private sector to invest have also not been addressed.

The uncertain outlook for the flow of Foreign Direct Investment into India and the persistent outflow of Foreign Portfolio Investments for the last several months were also among the challenges the Congress leader listed.

None of this was addressed by the Finance Minister's speech, Chidambaram said.

"It was therefore not surprising that the applause was perfunctory and most of the audience tuned out in quick time. Even the telecast by SANSAD TV switched off a few times," he said.