New Delhi, Feb 9 Senior Congress leader P Chidambaram on Monday criticized the government for reducing capital expenditure in 2025-26, arguing that "neither the public sector, the private sector, nor foreign investors are investing in India," and calling the 2026-27 Union Budget a "forgettable budget."
During a general discussion on the 2026-27 Union Budget in the Rajya Sabha, the former finance minister also stated that the government's much-touted "Reform Express" is either stalled or derailed, and that youth unemployment remains a serious challenge, despite the government's "internship scheme" failing.
Chidambaram also criticized the government for reducing allocations for agriculture and rural development, accusing it of neglecting roads and housing in villages.
"This is a forgettable budget," he asserted, "a forgettable budget prepared by a finance minister who forgot her promises made in this House last year."
Attacking the government, he said, "For almost 12 years, capital investment and gross fixed capital formation have remained at 30% of GDP. Net FDI in 2024-25 collapsed to less than 0.09%. Foreign portfolio investors are withdrawing. Private investment, although companies are cash-rich, is stuck at 22% of GDP."
He further stated, "Given that neither the public sector, the private sector, nor foreign investors are investing in India, this government has cut capital expenditure, amounting to a staggering ₹1,44,376 crore in 2025-26."
He added, "Furthermore, the Centre has cut its capital expenditure by ₹25,335 crore, and even worse, the state's capital expenditure, for which the Centre provides advance funds, has been cut by ₹1,19,041 crore."
Highlighting the challenge of unemployment, Chidambaram said, "Youth unemployment stands at 15%. Less than 25% of the workforce is in regular employment. There's a shift towards self-employment, and more workers are in the agricultural sector than in the past few years."
He continued, "In a country of 144 crore people, only 195 lakh, or less than two crore, are employed in factories. Manufacturing, which largely consists of factories, has remained at 16% for many years."
Referring to the PM Internship scheme, where corporate houses were encouraged to offer internships, Chidambaram said, "1,65,000 offers were received, but only 33,000 were accepted. Are there no young men and women willing to take up internships in major companies? And of the 33,000 accepted, 6,000 left their jobs."
He questioned, "What is wrong with the internship scheme? Why has it 'completely failed this year'?"
Pointing out the "slow growth rate," Chidambaram stated that the "Reform Express" mentioned by Finance Minister Nirmala Sitharaman in her budget speech, which is "on its way and will maintain its momentum to help us fulfill our Kartavya," is stalled and has not derailed.
He noted that the nominal growth rate in 2023-24 was 12%. In 2024-25, it declined to 9.8%.
"In 2025-26, which ends in a month, it has fallen to 8%. Where is the Reform Express gaining momentum?" Chidambaram asked.
Criticizing the government's fiscal consolidation efforts, he said, "At this rate of fiscal consolidation, it will take 12 years to achieve the FRBM target."
He added, "The FRBM target was last achieved only in one year – 2007-08, regarding the fiscal deficit. The fiscal deficit has ballooned."
Chidambaram alleged that the government has met its fiscal deficit target by reducing "total expenditure by ₹1 lakh crore, and the RBI has provided a dividend of ₹3 lakh crore."
He asserted, "But with these drastic cuts in capital expenditure, and with the bonanza received from the RBI, the fiscal deficit will not be 4.54%, it will be 5.5%."
Chidambaram criticized the cuts in allocations for agriculture and rural development, stating that there is a reduction of ₹60,000 crore.
"Agriculture has been cut by ₹6,985 crore, and Rural Development by ₹53,067 crore," he said, asking, "Are rural areas not in need of development when villages are crying for 'gram roads'?"
He also criticized the government for cutting grants and aids to states by ₹30,391 crore, while criticizing the spending of "only ₹17,000 crore out of ₹67,000 crore" earmarked for the Jal Jeevan Mission for providing drinking water to every household.
Chidambaram also noted that defense expenditure is at an all-time low at 1.6% of GDP, and took a dig at the finance minister for increasing the outlay on the electronics component manufacturing scheme to ₹40,000 crore from ₹22,919 crore, with an allocation of "just ₹1,500 crore," while no outlay has been announced for the proposed three chemical parks and for the ₹10,000 crore scheme for container manufacturing.