Chidambaram raises concerns over economy
Chidambaram noted that despite India’s higher growth rate, its GDP expansion was smaller compared to the United States and China
Senior Congress leader and former Union finance minister P Chidambaram on Thursday expressed concerns over the state of the Indian economy ahead of the presentation of the 2025-26 Union Budget, accusing the BJP-led Union government of failing to address rising inequality between the rich and the poor.
Chidambaram was talking to reporters after unveiling his party’s report, titled “The Real State of the Economy 2025”, describing it as a detailed account of the country’s economic situation. The Congress report, he said, draws on key facts, including press releases and statements that were “conveniently buried” by the Centre.
“The suppression of key data or significant delays in the availability of crucial economic data has become a pattern in the last decade. This has the effect of distorting policies and hindering accountability,” the report stated. “When data reveal unfavourable patterns, the government typically claims that the methodology is flawed. By withholding important information, the government has compromised the accuracy of national data and made it harder to address critical issues in areas like health, education, and employment.”
Talking about the report, Chidambaram pointed to a decline in government spending on crucial sectors like health, education, social welfare and rural development since 2017-18. He also commented on the upcoming Union Budget, referring to it as “Modi 3.0,” but suggested it was more of a “Modi 2.1,” believing there would be little departure from the previous government’s approach. He stressed the need for a shift in policy direction, warning that unless the government acknowledges the realities of the economy and adjusts its monetary and fiscal policies, it would likely follow the same course.
“I hope they will change, but they have not changed until yesterday in their pronouncements, and there are barely 48 hours left before the budget presentation,” he said.
Chidambaram compared India’s economic growth to other major economies. He noted that despite India’s higher growth rate, its GDP expansion was smaller compared to the United States and China. “The US added $787 billion to its GDP last year at a 2.7% growth rate. At 4.9%, China added $895 billion to its GDP. India only added $256 billion,” he said.
The senior leader also welcomed the new direct tax code aimed at simplifying taxpayer compliance, which is likely to be introduced by Union finance minister Nirmala Sitharaman during in the budget.
Congress leader and former Rajya Sabha MP MV Rajeev Gowda, who conducted the study, argued that India is witnessing a “job-loss” growth. Gowda pointed out that growth under the Bharatiya Janata Party (BJP)-led government had averaged 6%, compared to 7.6% during the United Progressive Alliance (UPA) years. He warned that this trend could lead to a “middle-income trap” for India. “We will be a stagnating, middle-income country, underproductive and uncompetitive globally,” Gowda said.
Gowda also highlighted the government’s failure to meet targets set under the ‘Make In India’ initiative, noting that the manufacturing sector’s average annual growth rate of 5.8% since 2013-14 fell short of the projected 12-14%. He added that the share of manufacturing in India’s GDP had remained stagnant at 15.8% in 2023-24, well below the target of 25% set for 2022.
Additionally, Gowda raised concerns over the emigration of high-net-worth individuals, revealing that 21,300 such individuals had left India between 2022 and 2025. “These are the people who should have been investing here,” he said.
For the poor, Gowda said welfare schemes across the board were “under attack”, including the projects under the MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) which encountered the “unkindest cut.” “A lot of the budget allocation for MGNREGA is used for previous year payment and not the amount that is going to those who are in distress,” he added.