New Delhi, Feb 9 (PTI) Senior Congress leader P Chidambaram on Monday attacked the government for cutting capital expenditure in 2025-26 at a time 'when neither the public sector, private sector nor foreign investors are investing in India', while terming Union Budget 2026-27 a "forgettable budget".

Initiating a general discussion on Union Budget 2026-27 in the Rajya Sabha, the former finance minister also said the government's much vaunted 'Reform Express' is stuck, if not derailed and while the unemployment among youth continues to pose serious challenge, the government's "internship scheme" has failed.

Chidambaram also hit out at the government for cutting allocations for agriculture and rural development accusing it of depriving roads and housing to villages.

"This is a forgettable budget, a forgettable budget which has been prepared by a finance minister, who forgot her promises made in this House last year," he asserted.

Attacking the government, he said,"For almost 12 years, capital investment, gross fixed capital formation, is stuck at 30 per cent of GDP. Net FDI in 2024-25 collapsed to less than 0.09 per cent. FPIs, foreign portfolio investors are pulling out. Private investment, although companies are cash rich, is stuck at 22 per cent of GDP." He further said,"In this situation where neither the public sector nor the private sector nor the foreign investor is investing in India, this government has cut capital expenditure. In the year 2025-26 they have cut capital expenditure by a whopping Rs 1,44,376 crore." The Centre has cut its capital expenditure by Rs 25,335 crore, he said, adding,"and what is worse the state's capital expenditure for which the Centre gives advances is cut by Rs 1,19,041 crore." Stressing on the challenge of unemployment, the senior Congress leader said,"Youth unemployment is 15 per cent. Less than 25 per cent of the workforce is in regular employment. There is a shift to self employment, and more workers are in the agriculture sector than they were four or five years ago." He further said,"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, many years." Highlighting the PM Internship scheme, in which the corporate houses were persuaded to offer internship, Chidambaram said,"1,65,000 offers came. Only 33,000 were accepted. Are there no young men and women to accept an internship in big companies?...and of the 33,000 that were accepted, 6,000 left the job." "What is wrong with the internship scheme?", he asked, demanding an explanation from Finance Minister Nirmala Sitharaman as to why the scheme has "totally failed this year".

Pointing out the challenge of "slow growth rate", he said the "Reform Express" mentioned by Sitharaman in her budget speech which is on "its way, and will maintain its momentum to help us fulfil our Kartavya" is stuck and it has not derailed yet.

He pointed out that the nominal growth rate in 2023-24 was 12 per cent. In 2024-25 it came down to 9.8 per cent.

"In 2025-26, the year which will end in a month, it has come down to 8 per cent. Where is the Reform Express gathering momentum?" Chidambaram asked.

Attacking the government's fiscal consolidation steps, he said,"at this rate of fiscal consolidation, it will take 12 years to achieve the FRBM (Fiscal Responsibility and Budget Management (FRBM) target." The FRBM target was last achieved only in one year -- 2007-08 on the fiscal deficit, he said, adding the fiscal deficit has ballooned.

Chidambaram alleged that the government was able to meet its fiscal deficit target by cutting "total expenditure Rs 1 lakh crore, and the RBI gave a dividend of Rs 3 lakh crore".

"But for these cruel cuts in capital expenditure, but for the bonanza received from the RBI, the fiscal deficit will not be 4.54 per cent, it will be 5.5 per cent," he asserted.

Hitting out at the cuts in allocation for agriculture and rural development, Chidambaram said there is a cut and expenditure of Rs 60,000 crore.

"Agriculture has been cut by Rs 6,985 crore. Rural Development has been cut by Rs 53,067 crore," he said, asking don't rural areas require any development when villages are crying for 'gram roads'.

He also hit out at the government for cutting grants and aids to states by Rs 30,391 crore, while criticising it for spending "only Rs 17,000 crore out of Rs 67,000 crore" earmarked for Jal Jeevan mission for providing drinking water to every household.

Chidambaram also noted that defence expenditure is at an all-time low at 1.6 per cent of GDP and also took a dig at the finance minister for increasing the outlay on electronics component manufacturing scheme to Rs 40,000 crore from Rs 22,919 crore with an allocation of "just Rs 1,500 crore" while no outlay has been announced for the proposed three chemical parks and for the Rs 10,000 crore scheme for container manufacturing. PTI RKL RKL ANU ANU

Union budget cuts to capital expenditure and rural allocations worsen investment shortfalls and hinder growth momentum. The budget reduces capital expenditure for both Centre and state-advance-funded projects during a period of weak public, private and foreign investment, contributing to lower gross fixed capital formation and slower nominal growth. The budget's fiscal consolidation path is criticised as slow under the FRBM framework and dependent on one-off central bank transfers and expenditure cuts. The document further identifies notable sectoral reductions-agriculture, rural development, state grants and targeted scheme outlays-that are said to undermine rural infrastructure, manufacturing capacity and employment initiatives.