Chidambaram Delivers Scathing Critique of Budget 2026, Labels It Intellectually Lazy
In a sharp rebuke, former Finance Minister P Chidambaram has condemned the Union Budget 2026-27 as an exercise in intellectual laziness, accusing the government of disregarding critical warnings outlined in the Economic Survey 2025-26. Chidambaram argues that while the Economic Survey meticulously identified pressing economic challenges, the Budget response was evasive and lacked substantive policy direction.
Economic Survey Highlights Multiple Challenges Ignored by Budget
The Economic Survey 2025-26 laid out a comprehensive analysis of India's economic hurdles, which Chidambaram emphasizes were largely overlooked in the Finance Minister's speech. Key issues include:
- Tariff Wars: President Trump's conditional tariff reductions, demanding India drop tariffs to zero on American goods and purchase $500 billion in U.S. products, pose significant trade difficulties.
- Investment Stagnation: Foreign direct investment remains below potential, with foreign portfolio investors withdrawing and domestic promoters hesitant to invest, keeping Gross Fixed Capital Formation stuck at 30% of GDP.
- Growth Momentum Loss: Nominal GDP growth has decelerated from 12% in 2023-24 to 8% in 2025-26, raising concerns about economic slowdown.
- Unemployment Crisis: Youth unemployment stood at 15% in June 2025, with only 21.7% of the workforce in regular salaried employment, indicating a shift toward self-employment.
- Manufacturing Shortfall: The manufacturing sector contributes merely 15-16% of GDP, with schemes like Make in India failing to generate sufficient jobs.
- Fiscal Consolidation Delay: Fiscal deficit reduction from 4.4% to 4.3% is agonizingly slow, potentially taking over 12 years to meet FRBM targets.
- Tax Gamble Failure: The budget was salvaged by an RBI dividend of approximately Rs 304,000 crore in 2025-26, highlighting reliance on external funds rather than robust tax policies.
Finance Minister's Response Deemed Non-Intellectual and Evasive
Chidambaram points out that the Chief Economic Adviser advocated for caution and a credible fiscal consolidation path in the Economic Survey, yet the Finance Minister's 85-minute Budget speech avoided addressing these core issues. Notably, there was no comment on Trump's tariff policies, global economic churn, China's expansion, or domestic concerns like poverty, inequality, and infrastructure gaps.
"My charitable view is that the Finance Minister and the government do not care for the Economic Survey. The uncharitable view is they think we are inhabiting a planet that is not part of the solar system," Chidambaram remarked, underscoring the disconnect between policy advice and government action.
Budget Allocations and Expenditure Cuts Under Scrutiny
The Budget faced criticism for poor financial management, with significant expenditure cuts in key ministries. For instance, Agriculture and Rural Development suffered a Rs 60,052 crore reduction under Shivraj Singh Chouhan's oversight, while the Jal Jeevan mission saw spending drop from an allocated Rs 67,000 crore to only Rs 17,000 crore in revised estimates. Capital expenditure declined from 3.2% to 3.1% of GDP, and defense expenditure fell to 1.6% of GDP, threatening to drop further.
Expert Backlash and Intellectual Laziness Allegations
Prominent economists have joined Chidambaram in criticizing the Budget. Dr. Surjit Bhalla ridiculed self-congratulatory claims about India being the fourth-largest economy, Dr. C Rangarajan highlighted the slow fiscal consolidation pace, Dr. Ashok Gulati deplored farm sector neglect, and Professor Rohit Lamba mocked the Budget as lacking a coherent plan. Chidambaram notes that the Finance Minister announced over 24 schemes without adequate funding allocations, reinforcing perceptions of intellectual laziness in policy formulation.
This critique underscores a growing concern that Budget 2026-27 fails to tackle India's economic challenges head-on, relying instead on superficial announcements rather than strategic, data-driven solutions.
