FM trudging on ‘worn-out’ path; tax cuts after decade of high rates: Congress

Congress leader P. Chidambaram and Gaurav Gogoi addressing the media on Budget at AICC, in New Delhi on Saturday.
| Photo Credit: Sushil Kumar Verma

The key takeaway of the Union Budget 2025-26 is that the BJP is wooing the tax-paying middle class and the electorate of Bihar, former Finance Minister P Chidambaram said on Saturday (February 1, 2025) as he charged Finance Minister Nirmala Sitharaman of following the “worn out” path.

Noting that the Chief Economic Adviser (CEA) in the Economic Survey had urged the government to “get out of the way,” Mr. Chidambaram claimed that it is clear that neither the Prime Minister nor the Finance Minister cared about his advice.

“The Finance Minister is walking on the worn-out path and she is not willing to break free as we did in 1991 and 2004. She is not willing to de-regulate. She is not willing to get out of the way of the people, especially the entrepreneurs and the MSMEs and the start-ups,” Mr. Chidambaram said at a press conference along with Congress’ Deputy Leader in the Lok Sabha, Gaurav Gogoi.

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“I would like to say that the economy will trudge along on the old path and deliver no more than the usual 6 per cent or 6.5 per cent growth in 2025-26. This is a far cry from the 8 per cent growth rate that the CEA estimated in order to become a developed country. In our view, this is a government with no new ideas and no will to reach beyond its grasp,” Mr. Chidambaram added.

He asserted that expenditure has been cut in key sectors like Health (₹1,255 crore), Education (₹11,584 crore), Social Welfare (₹10,019 crore), Agriculture (₹10,992 crore), Rural Development (₹75,133 crore), Urban Development (₹18,907 crore). “The cruellest cuts were in the allocations for the Scheduled Castes, Scheduled Tribes, Other Backward Classes and minorities,” Mr. Chidamabarm said.

The former finance minister said the Budget announcements will be welcomed by the 3.2 crore tax-paying middle-class and the 7.65 crore voters of Bihar, but for the rest of India, Ms. Sitharaman had no more than soothing words.

Taking note of the slew of schemes announced for Bihar, Mr. Chidambaram said, “Maybe she will come to the Rajya Sabha next from Bihar”.

In a post on X, Congress President Mallikarjun Kharge used a Hindi idiom ‘Nau sau choohe khake billi hajj ko chali’ (Seeking to be pious after committing a number of sins) to argue that the tax sops for the middle class have come after a decade of high tax rates. In the past decade, the Narendra Modi government has collected ₹54.18 lakh crore of income tax from the middle class, and now the exemption is being given to those earning up to ₹12 lakh, he added.

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This, Mr. Kharge claimed, resulted in a saving of ₹80,000 annually or ₹6,666 every month. “The whole country is struggling with the problem of inflation and unemployment, but the Modi government is bent on garnering false praises,” the Congress chief said.

Former Congress chief and Leader of the Opposition in the Lok Sabha Rahul Gandhi, in a post on X, said the Union Budget was like applying “band aid for bullet wounds”. “Ämid global uncertainty, solving our economic crisis demanded a a paradigm shift. But this government is bankrupt of ideas,” Mr. Gandhi noted.

Taking to X, Congress general secretary (communications) Jairam Ramesh said, “The economy is suffering from four related crises — stagnant real wages, lack of buoyancy in mass consumption, sluggish rates of private investment, complex and complicated GST system. The Budget does nothing to address these illnesses. The only relief has been for income tax payers. What actual impact this will have on the economy remains to be seen”.