Former Finance Minister P Chidambaram and Jairam Ramesh addressing the media on the Union Budget at the AICC in New Delhi on February 01, 2026. Photo R V Moorthy / The Hindu
| Photo Credit:
MOORTHY RV
Addressing a press conference, the senior Congress leader said revenue receipts were short by ₹78,086 crore, total expenditure was short by ₹1,00,503 crore. Revenue expenditure was short by ₹75,168 crore and capital expenditure was cut by ₹1,44,376 crore (Centre ₹25,335 crore and States ₹1,19,041 crore). Actually, the Centre’s capital expenditure has fallen from 3.2 per cent of GDP in 2024-25 to 3.1 per cent in 2025-26, he said.
“Not a word was said to explain this miserable performance,” Chidambaram said.
Chidambaram said the Budget speech failed to address at least 10 major macroeconomic challenges identified by the Economic Survey 2025-26, including stress on exporters due to US penal tariffs, protracted global trade conflicts, a widening trade deficit, especially with China, and weak private investment, with gross fixed capital formation stuck at around 30 per cent of GDP.
He also flagged uncertainty over FDI inflows, sustained foreign portfolio outflows, slow fiscal consolidation in violation of FRBM norms, a widening gap between official inflation data and household costs, widespread MSME closures, rising youth unemployment and deteriorating urban infrastructure.
According to Chidambaram, expenditure cuts were concentrated in sectors directly affecting households. Allocations were slashed by Rs 53,067 crore in rural development, ₹39,573 crore in urban development, ₹9,999 crore in social welfare, ₹6,985 crore in agriculture, ₹6,701 crore in education and ₹3,686 crore in health.
He said funds have been cut in crucial sectors and programmes. Expenditure on the much-vaunted Jal Jeevan Mission was cruelly cut from ₹67,000 crore to a paltry ₹17,000 crore. “In 2026-27, it has been boosted to ₹67,670 crore, but what credibility does the number have? He asked.
“After the months-long exercise, the revised estimate of the fiscal deficit has adhered to the budget estimate of 4.4 per cent, and the projection for 2026-27 is that the fiscal deficit will fall by a meagre 0.1 per cent of GDP. The revenue deficit will remain at 1.5 per cent. It is certainly not a bold exercise in fiscal prudence and consolidation. This is anything but bold fiscal consolidation,” Chidambaram said.
He also criticised the Finance Minister for announcing at least 24 new schemes, missions, funds and initiatives, arguing that many would “disappear without delivery.”
On taxation, Chidambaram said changes to rates under the Income Tax Act, 2026 would have limited impact, as most Indians do not pay income tax. He welcomed minor indirect tax concessions but said they offered little relief to households.
“The Budget fails the test of economic strategy and economic statesmanship,” Chidambaram said.
Published on February 1, 2026
