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Chidambaram listed four major economic challenges —stalled capital investment, rising unemployment, slowing growth, and weak fiscal consolidation
The debate on the Union Budget in the Rajya Sabha on Monday opened with a scathing attack by senior Congress leader P Chidambaram, who listed four major economic challenges —stalled capital investment, rising unemployment, slowing growth, and weak fiscal consolidation — and accusing the government of being disconnected from ground realities and presenting what he termed a “forgettable” Budget.
Chidambaram questioned whether the government had even read the Economic Survey, saying, “The most charitable view is that they don’t care for the Chief Economic Adviser. The uncharitable view is that while the Chief Economic Adviser is bringing the government down to earth, the ministers want to soar high and reach another planet as if we are not living on earth.”
On the first challenge—capital investment, Chidambaram said gross fixed capital formation has remained stuck at 30% of GDP for nearly 12 years, while private investment, despite companies being cash-rich, is stagnant at 22%. Net FDI in 2024–25, he claimed, has “collapsed to less than 0.09%,” with foreign portfolio investors pulling out. “In this situation neither the public sector nor the private sector nor the foreign investor is investing in India,” he said.
The second challenge, unemployment, he said, was the most pressing issue across the country. Youth unemployment stands at 15%, with less than 25% of the workforce in regular employment, alongside a shift towards self-employment and agriculture. “In a country of 144 crore people, only 195 lakh are employed in factories,” he noted, adding that manufacturing has been stuck at 16% for years. Referring to the Prime Minister’s internship scheme, announced in the 2024-2025 Budget, Chidambaram said corporate houses offered 165,000 internships, but only 33,000 were accepted and 6,000 later quit. “The finance minister must explain why the scheme has failed,” he said.
Highlighting the third challenge — slowing growth –– Chidambaram alleged GDP growth was declining, from 12% in 2023–24 to 9.8% in 2024–25 and 8% in 2025–26. “You say the Reform Express is underway. This Reform Express is not derailed, but it is stuck,” he said. He cited economist Sujeet Bhalla’s criticism of real GDP calculations.
On the fourth challenge — fiscal consolidation –– Chidambaram said the government was moving away from the internationally accepted fiscal deficit metric towards the debt-GDP ratio. “What saved the Finance Minister was not higher revenue but higher financial discipline,” he said.
Chidambaram also questioned budget allocations, alleging cuts to defence, science, social welfare and urban development, and said several schemes were announced without adequate outlays. “This Budget is cautious, parsimonious and forgetful of the past year. It has vanished from the newspapers… This is a forgettable Budget prepared by a finance minister who forgot her promises made in the House last year,” he said.
In a counter attack, BJP MP Arun Singh defended the Budget, saying its size tripled over the years and credited the Prime Minister for controlling inflation. He highlighted large allocations for housing for the poor and said over ₹4 lakh crore was directly transferred to farmers instead of farm loan waivers. Singh also claimed increases in grain and horticulture production and said allocations to the VB G Ram G scheme were up by 22% compared to last year’s MNREGS outlay.
