New Delhi, February 1: Congress leader P. Chidambaram has strongly criticized the Union Budget- 2025-26, accusing Finance Minister Nirmala Sitharaman of sticking to an outdated path and ignoring the Chief Economic Advisor’s call for deregulation. He stated that both Sitharaman and Prime Minister Narendra Modi have failed to act on the advice of Chief Economic Advisor (CEA) V. Anant Nageswaran, who recommended reducing government interference in economic activities.
Addressing a press conference in New Delhi, Chidambaram, the former Finance Minister, predicted that the economy would continue along its current trajectory, growing at a modest 6-6.5% in 2025-26 — far from the 8% growth rate required to achieve developed country status, as suggested by the CEA. He described the government's approach as lacking fresh ideas and the ambition to pursue meaningful economic reform.
Recounting the past economic reforms in 1991 and 2004, Chidambaram said that Sitharaman was unwilling to take bold steps, such as deregulation, which were vital for economic growth. He specifically noted that the Finance Minister had not heeded Nageswaran's advice to “get out of the way” of the economy. Instead, he pointed out, the Budget introduced numerous new schemes and funds, many of which exceeded the government’s capacity to implement effectively.
Chidambaram argued that the budget would benefit the bureaucracy more than entrepreneurs, MSMEs, and startups, further tightening the government’s grip on economic activities. “The FM is not willing to deregulate or ease the path for businesses. The government’s control over people's activities is only growing stronger,” he said.
The Congress leader also claimed that the Budget appeared aimed at appealing to the tax-paying middle class and voters in Bihar, where elections are due later this year. He noted that the 3.2 crore tax-paying middle class and the 7.65 crore voters in Bihar would likely welcome the announcements, while the rest of India would receive little more than "soothing words" from the Finance Minister, accompanied by applause from BJP members, including the Prime Minister.
Turning to the Modi government’s financial performance in 2024-25, Chidambaram highlighted significant shortfalls in revenue and cuts in expenditure. He pointed out that revised revenue receipts were lower by Rs 41,240 crore, with net tax receipts falling short by Rs 26,439 crore. On the expenditure side, total spending had been reduced by Rs 1.04 lakh crore, with capital expenditure seeing a cut of Rs 92,682 crore. The sectors most affected by these cuts included Health (Rs 1,255 crore), Education (Rs 11,584 crore), Social Welfare (Rs 10,019 crore), Agriculture (Rs 10,992 crore), Rural Development (Rs 75,133 crore), Urban Development (Rs 18,907 crore), and the Development of the Northeast (Rs 1,894 crore). Chidambaram also pointed to the “cruelest cuts” in allocations for SC, ST, OBC, and minority welfare programs.
Chidambaram dismissed any claims of fiscal improvement, criticizing the reduction of the fiscal deficit from the original estimate of 4.9% to a revised estimate of 4.8% as nothing to celebrate.
