New Delhi, Feb 10 (UNI) Senior Congress leader and former Finance Minister P Chidambaram on Monday slammed Union Budget 2025-26 and said that Finance Minister Nirmala Sitharaman while presenting the Budget focussed only on income tax and Delhi elections while offering little to boost consumption in the economy.
Participating in general discussion on the Budget in Rajya Sabha, Chidambaram welcomed the government's move to provide income tax relief to the middle class but also pointed out that the tax concessions have also been given to those having annual income in crores.
"Income tax cut is the Finance Minister's main thrust in the Budget. The House should know that only 3.2 crore persons pay income tax. My rough calculation is about 80-85 lakh taxpayers will go out of the tax net from next year and 2.5 crore will benefit. The 2.5 crore (taxpayers) not only includes Middle class which the FM passionately champions, it includes 2,27,315 persons who returned the total income of more than 1 crore (as per latest income tax data)," he said.
The former Minister further said, "It includes 262 persons who returned a total income of more than 100 crore and it includes 23 persons who returned a total income of more than Rs 500 crore."
"So, this is not benefitting the middle class alone, which I welcome, but is benefitting very rich and the richest in the world," Chidambaram said in his pointed attack.
The senior Congress leader said that the Finance Minister had claimed that she has foregone Rs 1 lakh crore yet she claimed that the net tax revenue to the Centre will grow by 11.1% in 2025-26.
"After foregoing Rs 1 lakh crore in this Budget how would she claim that the net tax revenue to the Centre would grow by the same 11% (as in 2024-25). This is pure magic, not mathematics. I will reserve (my comment on) how this magic unfolds and I will comment on it later," Chidambaram said.
He claimed that the tax relief provided in the Budget would not be sufficient to boost the economy as it accounted for a fraction of the total size of India's GDP (gross domestic product).
"The Finance Minister says that Rs 1 lakh crore will go into consumption and that consumption will boost economy. I find, initially, a lot of cheerleaders accepted that claim, but in the last 2-3 days even the finance minister's cheerleaders are becoming skeptical about that," he said.
"I ask the Finance Minister. Will not part of Rs 1 lakh will go into savings. SBI (State Bank of India) Chairman has hoped that part of it will come to him and the banking system. Will not the part of Rs 1 lakh crore go into rapaying old household debts? Will not the part of Rs 1 lakh crore go into travel abroad? Will it not go for educating children abroad and will it not go into consuming imported goods? If you deduct all this, how does the Hon'ble Finance Minister claim that the entire Rs 1 lakh crore will go into consuming domestic goods and services. It's only consumption of domestic goods and services will boost the GDP rate," Chidambaram said.
"Besides, what is Rs 1 lakh crore when compared to the size of the GDP. The size of the GDP this year is Rs 324 lakh crore. Rs 1 lakh crore of Rs 324 lakh crore is 0.3%. Are you seriously saying and are you asking this House to believe that 0.3% will boost the economy?" he said while launching sharp attack on the Finance Minister.
"My humble advice to the Finance Minister is don't rely on only one engine of growth -- consumption. Look at other engines of growth like exports, capital investment. Those are the engines which must be revved up," Chidambaram said.
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