While speaking in the Rajya Sabha during the general discussion on the Union Budget FY27, senior Congress leader and former finance minister P. Chidambaram said that the “Reform Express is not derailed yet, but it is stuck”.
Chidambaram cited the declining nominal GDP growth rate to prove his point and attack Finance Minister Nirmala Sitharaman, who in her Budget speech said that the reform express is well on its way and will maintain its momentum to help fulfil their kartavya (duty).
He pointed out that the nominal growth rate in FY24 was 12%. In FY25, it came down to 9.8%, and slipped further in FY26 to 8%.
“Where is the Reform Express gathering momentum?” he asked in the Rajya Sabha. “I’m pointing out, Madam, that your paragraph 14 of your Budget speech is totally wrong and unacceptable,” he added.
Along with this, Chidambaram also pinpointed a few challenges in the Budget speech and claimed that the government ignored the Economic Survey while preparing the Budget.
#1. Chidambaram flags slow fiscal consolidation despite meeting deficit target
Chidambaram said fiscal consolidation remains sluggish despite the government meeting its fiscal deficit target of 4.4% in FY26.
The fiscal deficit is projected to fall only marginally to 4.3% next year, while the revenue deficit remains unchanged at 1.5%.
“At this rate of consolidation, it will take 12 years to achieve the FRBM target,” he added.
Chidambaram argued that the fiscal deficit was contained mainly due to expenditure cuts of Rs 1 lakh crore and a Rs 3 lakh crore dividend from the RBI, rather than higher revenues.
#2. Capital investment stuck for 12 years, private and foreign flows weak: Chidambaram
He highlighted that capital investment has remained stagnant for nearly 12 years, with gross fixed capital formation stuck at around 30% of GDP.
Private investment, despite companies being cash-rich, has stayed at around 22% of GDP, while net foreign direct investment in 2024–25 has collapsed to less than 0.09%.
“In a situation where neither the public sector, nor the private sector, nor foreign investors are investing, the government has cut capital expenditure,” he said.
#3. Chidambaram flags Rs 1.44 lakh crore cut in capital expenditure
Chidambaram questioned the Finance Minister’s move to cut the capital expenditure at a time when neither the public sector nor the private sector or the foreign investor is investing in India.
He pointed out that capital expenditure in FY25–26 was cut by Rs 1.44 lakh crore, including a Rs 25,335 crore reduction by the Centre and a Rs 19,041 crore cut in state capital spending supported through central advances.
“There is no explanation for this in the finance minister’s speech,” he added.
#3. Chidambaram questions performance of PM Internship Scheme
Chidambaram also questioned the government’s flagship PM Internship Scheme, which was announced in the previous budget.
Out of 1.65 lakh applicants, only 33,000 were selected, and around 6,000 later dropped out.
“She must explain why the scheme has totally failed this year,” he said.
He noted that this is the situation at a time when unemployment is still a challenge. “Youth unemployment is 15% and ess than 25% of the workforce is in regular employment.”
“Are there no young men and women to accept an internship in big companies? Only 33,000 accepted and after 33,000 were accepted, 6,000 left the job. So what is wrong with the internship scheme She touted it last year?” he questioned.
#4. Many schemes have negligible or zero outlays: Chidambaram
Chidambaram raised concerns about many schemes that were announced, including chemical parks, container manufacturing, national fibre and mega textile parks, but had zero or negligible budgetary outlays.
“Schemes are announced, but where is the money?” he asked.
Chidambaram also highlighted under spending by different ministries such as Scientific departments, urban development, and social welfare ministries failed to spend significant allocated funds.
Chidambaram concluded his speech by saying that “this year’s Budget was a forgettable budget prepared by a Finance Minister who forgot her promises made in this House last year.” He added that Sitharaman announced several schemes like Indian semiconductor mission 2.0 but What happened to ISM 1.0? There is no mention of that.