Chidambaram flags ‘hollow budgeting’, says schemes lack funds and ministries failed to deliver

Congress MP P Chidambaram speaks in the Rajya Sabha during the Budget session of Parliament, in New Delhi | Photo Credit: -

Former finance minister P Chidambaram on Monday mounted a blistering attack on the Union Budget, arguing that the government had announced a slew of schemes and missions without backing them with adequate financial allocations, while ministries had also failed to spend what was already provided.

Participating in the debate on the Budget in the Rajya Sabha, Chidambaram said the defining feature of the exercise was the widening gap between announcements and implementation. “Schemes are thrown at Parliament, but the outlays are either negligible or zero, and even the allocated money is not spent,” he said, citing the Jal Jeevan Mission as a stark example. Chidambaram said the flagship drinking water programme was allocated ₹67,000 crore in the last fiscal but spent only ₹17,000 crore. “Whatever is going on? People are dying because of contaminated water and the Jal Jivan Mission is cut by ₹50,000 crore,” he exclaimed.

Chidambaram said this pattern of underspending ran across ministries. Agriculture and rural development together saw a cut of nearly ₹60,000 crore in expenditure, with rural development alone underspending by over ₹53,000 crore. The Pradhan Mantri Gram Sadak Yojana saw a cut of over ₹7201 crore, housing schemes were pared by RS 22,331 crore, and grants and aid to States were reduced by more than ₹30,390 crore, he noted.

Pointing to the government’s failure to address challenges highlighted in the Economic Survey, Chidambaram said a big concern is youth unemployment which is 15 per cent. He said less than 25 per cent of the workforce is in regular employment and there is a shift to self employment. More workers are in the agriculture sector than they were four or five years ago. In a country with 144 crore people, only 195 lakh, that is, less than two crore, are employed in a factory. Manufacturing, which is largely factories, is stuck at 16 per cent for many years. Chidambaram said the PM Internship Scheme has been an utter failure.

“The PM Internship Scheme was touted last year. Corporate houses were persuaded to offer internship and 1,65,000 offers came of which only 33,000 were accepted. Are there no young men and women to accept an internship in big companies? Only 33,000 accepted. And after 33,000 were accepted, 6000 left the job. So what is wrong with the Internship Scheme? She (Finance Minister) touted it last year. She must explain why the scheme has totally failed,” he said.

He described as “startling” the allocation of just ₹54 crore for championing small and medium manufacturing enterprises. “How do you champion SMEs with ₹54 crore?” he asked, calling it emblematic of the Budget’s lack of seriousness.

On the macroeconomic front, Chidambaram accused the government of excessive optimism and selective use of data. While the finance minister spoke of a “reform express” gathering momentum, he pointed out that nominal GDP growth had steadily slowed, from 12 per cent in 2023-24 to 9.8 per cent in 2024-25 and about 8 per cent in 2025-26. “Where is the reform express gathering momentum?” he asked, arguing that low inflation deflator was being used to inflate real growth numbers.

Weak investment indicators

He also flagged weak investment indicators, noting that gross fixed capital formation had been stuck around 30 per cent of GDP for over a decade, private investment at about 22 per cent, and net foreign direct investment collapsing to below 0.09 per cent of GDP. Against this backdrop, he said, the government had cut capital expenditure sharply, including a reduction of over ₹1.44 lakh crore when Centre and state capital spending were taken together.

On fiscal consolidation, Chidambaram warned that progress was painfully slow, with the fiscal deficit projected to fall only marginally from 4.4 per cent to 4.3 per cent next year and the revenue deficit stuck at 1.5 per cent. At the current pace, he said, it would take 12 years to meet FRBM targets, a process he likened to “baby steps” that would never win a race.

He argued that the fiscal numbers were saved not by higher revenues but by deep expenditure cut of ₹1 lakh crore and a large dividend of ₹3 lakh crore from the Reserve Bank of India. “But for the cruel cuts in capital expenditure and the RBI bonanza, the fiscal deficit would have been 5.5 per cent,” he said.

Published on February 9, 2026