Budget....!

The Finance Minister has presented the Budget for 2026-27, and I have a brief opening statement on it.

Every pre-budget commentator and writer, and every student of economics, must be astonished by what he or she heard in the Finance Minister’s speech to Parliament today.

I accept that a Budget is more than a statement of annual revenues and expenditure. In current circumstances, the Budget speech must lay out a narrative that addresses the major challenges outlined in the Economic Survey released a few days ago.

I am not sure if the government and the Finance Minister had read the Economic Survey 2025-26. If they had, it appears they have decided to discard it completely, and fall back on their favourite pastime of throwing words—usually acronyms—at the people.

I can count at least 10 challenges identified by the Economic Survey and many knowledgeable experts.

1.The penal tariffs imposed by the United States have created stress for manufacturers, especially exporters;

2. Protracted trade conflicts that will weigh on investment;

3. The growing trade deficit, especially with China;

4. The low Gross Fixed Capital Formation (approx. 30 per cent) and the reluctance of the private sector to invest;

5. The uncertain outlook for the flow of FDI (foreign direct investment) into India and the persistent outflow of FPI for the last several months;

6. The agonisingly slow pace of fiscal consolidation and the continued high fiscal deficit and revenue deficit, contrary to the FRBM;

7.The persistent gap between officially announced inflation numbers and the ground realities in terms of bills for household expenditure, education, healthcare and transport;

8. The closure of lakhs of MSMEs and the struggle for survival of the remaining MSMEs;

9. The precarious employment situation, especially youth unemployment;

10. Growing urbanisation and the deteriorating infrastructure in urban areas (municipalities and corporations).

None of this was addressed by the Finance Minister’s speech. It was therefore not surprising that the applause was perfunctory and most of the audience tuned out in quick time. Even the telecast by Sansad TV switched off a few times.

: Former Finance Minister Shri PChidambaram_IN