Budget 2026: Sitharaman did not address key concerns, says P Chidambaram

Senior Congress leader P Chidambaram on Sunday said that several major economic problems, including rupee depreciation, slow fiscal correction, high fiscal deficit and revenue deficit, were not addressed by Finance Minister Nirmala Sitharaman in her 2026 Budget speech.

 

Chidambaram, who has served as the finance minister four times, said the Budget failed "the test of economic strategy and economic statesmanship".

Key issues ignored, says Chidambaram

Chidambaram listed a series of concerns that he said were completely left out of the Budget. These included "the agonisingly slow pace" of fiscal consolidation, the continued high fiscal and revenue deficits, and the gap between official inflation numbers and the real cost of living for households.

 

 

While the fiscal deficit stood at 4.4 per cent, it is projected to fall only marginally to 4.3 per cent next year, and the revenue deficit remains unchanged at 1.5 per cent. “It’s certainly not a bold exercise in fiscal progress and fiscal consolidation,” he said.

 

He also flagged the closure of many micro, small, and medium enterprises (MSMEs), the struggle of those still operating, rising youth unemployment, poor urban infrastructure and the steady fall of the rupee. “Not one of the challenges was addressed by the finance minister,” he said.

 

He claimed this is why many people lost interest in the speech. “Therefore not surprising that the applause was perfunctory and most of the audience tuned out in quick time,” Chidambaram added. 

Budget speech ‘peppered with schemes’

Chidambaram said the Budget speech was filled with new schemes that people are likely to forget soon.

 

“The most serious criticism of the budget speech is that the finance minister is not tired of announcing schemes, programmes, missions, institutes, initiatives, funds, committees, hubs... I leave it to your imagination how many of these will be forgotten and vanish next year?” he said.

Chidambaram on income tax

On income tax proposals, Chidambaram said the government is "tinkering" with the Income Tax Act, 2025, which is set to take effect in April 2026. He said the real impact of these changes still needs close examination.

 

He added that while people care deeply about income tax, the government must also pay attention to indirect taxes, which affect everyone, especially common households.

 

‘Poor management of finances’

Criticising the government’s handling of public money, Chidambaram said that even by basic accounting standards, financial management had been weak. He pointed out gaps between budget estimates and actual figures for the last year.

 

He said revenue receipts fell short, spending overshot estimates and capital expenditure was cut. He also noted that the Centre’s capital expenditure fell as a share of gross domestic product, to 3.1 per cent in 2025-26 from 3.2 per cent in 2024-25.