Chidambaram Slams Union Budget 2026-2027 as Cautious and Forgettable in Rajya Sabha
Initiating the discussion on the Union Budget 2026-2027 in the Rajya Sabha, Congress MP and former Finance Minister P Chidambaram strongly criticized the financial plan presented by Finance Minister Nirmala Sitharaman. He described the budget as "cautious," "parsimonious," and "forgettable," arguing that it fails to address key economic challenges at a time when investment is lagging.
Criticism of Capital Expenditure Cuts and Investment Trends
Chidambaram pointed out that the government had reduced capital expenditure by Rs 1.44 lakh crore in the 2025-2026 fiscal year, despite public, private, and foreign investors showing reluctance to invest in India. He questioned whether the government had thoroughly reviewed the Economic Survey, which highlights issues such as:
- Challenges in capital investment
- High unemployment rates
- Slow fiscal consolidation
- Declining growth rates
On capital formation, he noted that gross capital formation has remained stagnant at 30% of GDP for nearly 12 years. Additionally, net FDI collapsed to 0.09% in 2024-2025, and private investment stands at only 22% of GDP.
Slow Economic Reforms and Growth Concerns
Responding to the Finance Minister's claim that the "reform express" is progressing well, Chidambaram countered, "The Reform Express is stuck. It is not derailed yet, but it's stuck." He highlighted a concerning trend in nominal growth rates, which dropped from 12% in 2023-2024 to 9.8% in 2024-2025 and further to 8% in 2025-2026.
Regarding fiscal consolidation, Chidambaram expressed skepticism, stating that at the current pace, it would take 12 years to achieve the Fiscal Responsibility and Budget Management (FRBM) target of a 3% fiscal deficit to GDP ratio. He concluded, "I am afraid this Budget is cautious, parsimonious, forgetful of the past year and this will vanish. It has already vanished from the newspapers."
Opposition MPs Voice Additional Concerns
Other Opposition members joined in criticizing the budget. TMC MP Sushmita Dev highlighted the absence of a Census, referring to the delayed 2021 Census. DMK MP P Wilson accused the government of discriminating against states like Tamil Nadu, which he called a "best performer," by not allocating sufficient funds. Finance Minister Nirmala Sitharaman interjected, defending the budget and listing schemes such as the Coconut Promotion Scheme that benefit Tamil Nadu.
AAP MP Raghav Chadha proposed innovative measures, including legalizing virtual digital assets, implementing a blockchain-based land registry, and eliminating long-term capital gains tax on equities. CPI(M) MP A A Rahim raised concerns about youth facing hardships, describing them as "haunted by three nightmares — EMIs, CIBIL scores, and targets" in the unorganized sector.
Congress MP Randeep Singh Surjewala labeled the budget as anti-farm, noting that schemes announced the previous year for pulses, vegetables, fruits, and cotton received no allocations this year. He revealed that the Ministry of Agriculture surrendered Rs 1.17 lakh crore from 2018-2019 to 2023-2024, calling it a "surrender sarkar."
Government Defense and Future Discussions
In response, BJP MP Arun Singh defended the budget, emphasizing that the India-US trade deal would benefit small and medium enterprises and predicting a "current account surplus" in the coming years. The discussion on the Union Budget 2026-2027 is set to continue on Tuesday, with further debates expected in the Rajya Sabha.
