Union Budget 2026: 10 key issues Nirmala Sitharaman failed to address

Veteran Congress leader and former Union Finance Minister P. Chidambaram on Sunday launched a scathing attack on the Union Budget 2026–27, saying it “fails the test of economic strategy and economic statesmanship” and lacks both fiscal prudence and vision.

Addressing a press conference at the Congress headquarters in Delhi, the Rajya Sabha MP alleged that the government has cut funds for crucial sectors and programmes while significantly reducing capital expenditure. “This Budget is not a bold exercise in fiscal consolidation,” he said.

Chidambaram also criticised Finance Minister Nirmala Sitharaman for ignoring several pressing economic challenges in her Budget speech, including India’s growing trade deficit with China and the impact of penal tariffs imposed by US President Donald Trump.

“I am not sure whether the government has read the Economic Survey. If it has, then it appears to have decided to discard it completely and fall back on its favourite pastime of throwing words—usually anachronisms—at the people,” Chidambaram remarked.

He said the Economic Survey and independent experts have flagged at least 10 major challenges, none of which were adequately addressed in the Budget:

1.    Penal tariffs imposed by the United States, creating stress for manufacturers, especially exporters;

2.    Protracted global trade conflicts that will dampen investment sentiment;

3.    A growing trade deficit, particularly with China;

4.    Low Gross Fixed Capital Formation (around 30%) and the private sector’s reluctance to invest;

5.    An uncertain outlook for foreign direct investment (FDI) and persistent outflows of foreign portfolio investment (FPI);

6.    The agonisingly slow pace of fiscal consolidation, with high fiscal and revenue deficits in violation of FRBM targets;

7.    A widening gap between official inflation data and ground-level household expenses on education, healthcare and transport;

8.    Closure of lakhs of MSMEs and the survival struggle of those still operational;

9.    A precarious employment situation, especially rising youth unemployment;

10. Rapid urbanisation coupled with deteriorating urban infrastructure in municipalities and corporations.

The former finance minister also took a dig at Sitharaman for announcing a slew of new schemes, programmes, missions and initiatives. “The Finance Minister is not tired of adding to the list.

Many of these schemes will likely be forgotten and vanish by next year,” he said, adding that the government must clearly spell out how the Budget will generate employment.

Commenting on tax proposals, Chidambaram noted that months after the passage of the Income Tax Act, 2026—set to come into force on April 1, 2026—the Finance Minister has merely tinkered with some rates.

“While the impact of these numerous minor changes needs careful examination, it must be remembered that the overwhelming majority of people have no concern with income tax or income tax rates,” he said.