Chidambaram terms budget as cautious, forgettable; BJP praises Modi for winning taxpayers trust, more capex for infra
Former Finance Minister and Congress leader P Chidambaram opened the budget debate in the Upper House on Monday with harsh remarks on the state of the economy. He claimed that the Economic Survey’s recommendations were not taken into account.
“I’m afraid this budget is cautious, stingy, forgetting last year and that too will disappear. Another minister and another agreement occupy the front pages. The Ministry of External Affairs and the budget have disappeared. This is a forgettable budget prepared by a finance minister who has forgotten the promises he made in this House last year,” Chidambaram said.
Chidambaram argued that the recommendations of Chief Economic Research Advisor V Anantha Nageswaran were ignored. “The most charitable view is that they do not care about the Chief Economic Adviser. The cruel view is that while the CEA wants to bring the government down to earth… the government and ministers want to fly high and reach another planet as if we did not live on earth.”
He listed four challenges facing the economy: lack of growth in capital investment, high unemployment, slow growth rate, and the dismal pace of fiscal consolidation.
On capital investment, Chidambaram said gross fixed capital formation remained at 30 per cent of GDP for 12 years, while net foreign direct investment fell below 0.09 per cent in 2024-25. Private investments stagnated. Capital expenditure has been reduced by Rs 1,44,376 Crore in 2025-26, while state capital expenditure has been reduced by Rs 1,19,041 Crore.
He also attacked the government over high unemployment, stating that youth unemployment stands at 15% and less than 25% of the workforce is employed in regular jobs. More people have been forced into agriculture and there are less than two crore factory jobs. “The PM internship program failed as only 33,000 out of 1.65 Lakh offers were accepted and 6,000 left.”The third challenge is the slow growth rate. Nominal GDP growth has fallen from 12% in 2023-24 to 9.8% in 2024-25 and 8% in 2025-26,” Chidambaram said.
The Congress leader also expressed concern over the slow pace of fiscal consolidation and said that the fiscal deficit and debt-to-GDP figures were not satisfactory. While the fiscal deficit remains constant at 4.4 per cent and revenue deficit at 1.5 per cent in 2025-26, the FRBM target of 3 per cent will be achieved only in 12 years, he said, adding that these “baby steps” are not enough.
Chidambaram also criticized the government for the ministries’ failure to spend the funds allocated to them in the last budget and the massive cut in budgetary allocations to agriculture, rural development and Jal Shakti ministries in this year’s budget.
“I am calling (Agriculture and Rural Development Minister) Shivraj Singh Chouhan and (Jal Shakti Minister) CR Patil. I am surprised that there has been a cut of Rs 60,000 crore in the agriculture and rural development budget. Rs 6,985 crore has been cut in agriculture and Rs 53,067 crore in rural development. Don’t rural areas need any development?” he said.
He claimed that the Jal Shakti ministry spent only Rs 17,000 of the Rs 67,000 allocated to it last year. “What is happening? Why is there a budget? People are dying due to dirty water in Indore,” he said.
He also emphasized that defense spending had been reduced to an “all-time low” of 1.6 percent of GDP and 11.4 percent of total spending. He said scientific departments, urban development and social welfare have failed to spend the allocated funds and a cut of Rs 9,999 crore has been made for social welfare this year.
“What are the ministers doing? Why aren’t they implementing the programmes, not spending the money?” he said.
Examining Sitharaman, he said, “I must compliment the finance minister. She has found the formula to fascinate half of the House. She is setting up plans, funds, missions, committees. I counted 24…”
BJP leader Arun Singh praised the prime minister and the government for a budget that “strengthens people’s aspirations and helps transition from Sankalp to Siddhi (promise of success)”. He highlighted that today’s capital expenditure allocation of Rs 12.5 Lakh Crore is well above Rs 2.50 Lakh Crore. He congratulated the finance minister for fixing the fiscal deficit target at 4.3%.
Singh compared India’s debt to GDP ratio with other countries and said that at 55.6%, this ratio is lower than many countries. “Accordingly, taxpayer’s trust in Prime Minister Modi is increasing,” he said, adding that the taxpayer base and the number of demat accounts are increasing.
The BJP MP also talked about reduction in current account deficit, increase in mobile phone exports, more private investment in defence, higher foreign exchange, lower inflation, more funds from G Ram G scheme and railways.
“We are winning elections because the benefits reach the beneficiaries directly. People see Modi as their messiah,” he said.
TMC member Sushmita Dev claimed that she found the issues on which the budget remained silent “shocking”. He also wondered about the accuracy of the data provided by the government, since no census has been conducted since 2011.
“The finance minister presented nine budgets, the same as P Chidambaram’s. But six of his budgets were presented without the Census. He does not know the number of Raja prajas. Why did you not conduct a census?” he said.
Dev also questioned the government’s claim of lifting 25 crore people out of poverty and claimed that one of the criteria set by Niti Aayog for getting out of poverty is having a Jan Dhan account. Jan Dhan said 23% of its accounts are inactive.
The TMC leader claimed that West Bengal is performing well despite being discriminated against by the Centre. “Unemployment in West Bengal has decreased by 40 per cent,” he said.
Dev alleged that the “backdoor NRC was done through SIR” and argued that it would backfire for the BJP. “How many spies did you catch?” he asked.
P Wilson (DMK) said the government was ignorant about the debt trap. He also brought up the India-US trade agreement and said, “While there is no statement from Raisina Hill about the agreement, Capitol Hill is happy. There is surrender to the US,” and expressed his concerns about the “weaponization of tariffs”.
“Make’s wild lion in India has become the domestic cat of the United States,” he said.
Sitharaman countered Wilson’s accusation that there was nothing for Tamil Nadu in the budget. “This is absolutely wrong,” he said, adding that the Rare Earth corridor, girls’ hostel in every district, sauces for fishermen and coconut farmers as well as the allied health program would benefit the state.
Raghav Chadda (AAP) listed some good points of the budget like increase in STT, increase in capital expenditure, restriction of budgetary allocations for electoral states, but said there was no change in tax slabs, no relief for the middle class, less allocation for education and health. He suggested that there should be a wage indexation formula.
Sanjay Jha (JDU) lauded the budget as one that marks the beginning of a new era in the economic sector. “This budget clearly shows that the focus of this government is long term economic stability and development. After struggling with economic instability, energy deficit and economic pressures, the government is now giving priority to the creation of new capabilities and productive investment,” he said, adding that the budget shows fiscal discipline and robust planning.
