Union Budget 2026–27 Is ‘Forgettable’, Says P Chidambaram; Flags Jobs, Investment Woes

Senior Congress leader and former Finance Minister P Chidambaram on Monday strongly criticised the Union Budget 2026–27, calling it a “forgettable budget” and accusing the government of failing to honour promises made in Parliament last year.

Speaking during the general discussion on the Budget in the Rajya Sabha, Chidambaram said the government has reduced capital expenditure at a time when public sector, private sector, and foreign investors are not investing adequately in the Indian economy.

He claimed that capital investment has remained stagnant at around 30 per cent of GDP for nearly 12 years. According to him, net foreign direct investment in 2024–25 fell sharply to less than 0.09 per cent of GDP, while foreign portfolio investors are withdrawing money. Private investment, despite companies being cash-rich, is stuck at about 22 per cent of GDP.

“In such a situation, the government has cut capital expenditure by a massive ₹1.44 lakh crore in 2025–26,” Chidambaram said. He added that the Centre’s own capital spending was reduced by ₹25,335 crore, while capital expenditure by states — supported through central advances — was cut by ₹1.19 lakh crore.

Raising concerns over unemployment, the Congress leader said youth unemployment stands at 15 per cent and less than one-fourth of the workforce has regular jobs. He noted a growing shift towards self-employment and said more people are now working in agriculture than they were a few years ago.

He also highlighted the slow growth of the manufacturing sector, stating that manufacturing has been stuck at around 16 per cent of GDP for many years. “In a country of 144 crore people, fewer than two crore are employed in factories,” he said.

Chidambaram criticised the government’s PM Internship Scheme, saying it had failed to attract young people. Out of 1.65 lakh internship offers made by corporate houses, only 33,000 were accepted, and nearly 6,000 interns later quit. “What is wrong with the scheme?” he asked, demanding an explanation from Finance Minister Nirmala Sitharaman.

Questioning the government’s claims of rapid reforms, Chidambaram said the much-publicised “Reform Express” has lost momentum. He pointed out that nominal growth fell from 12 per cent in 2023–24 to 9.8 per cent in 2024–25, and further to 8 per cent in 2025–26.

On fiscal management, he said the current pace of fiscal consolidation would take another 12 years to meet the Fiscal Responsibility and Budget Management (FRBM) targets. He alleged that the government met its fiscal deficit target mainly by cutting total expenditure by ₹1 lakh crore and receiving a ₹3 lakh crore dividend from the Reserve Bank of India.

“If not for these harsh expenditure cuts and the RBI windfall, the fiscal deficit would have been 5.5 per cent, not 4.54 per cent,” he said.

Chidambaram also criticised cuts in agriculture and rural development spending, stating that agriculture allocations were reduced by ₹6,985 crore and rural development by ₹53,067 crore. He said rural areas are suffering due to lack of roads and housing.

He further pointed out a reduction of ₹30,391 crore in grants to states and criticised under-spending on the Jal Jeevan Mission, saying only ₹17,000 crore was spent out of the ₹67,000 crore allocated.

The former finance minister also noted that defence spending has fallen to an all-time low of 1.6 per cent of GDP. He questioned the government’s priorities, pointing out that while allocations for electronics component manufacturing were increased, no funds were announced for proposed chemical parks or the container manufacturing scheme.