Concerns Raised Over Upcoming Central Budget by Senior Congress Leader Jairam Ramesh
Jairam Ramesh, a senior Congress leader, has expressed significant concerns regarding the upcoming central budget, warning of a fragile economic situation as preparations for the parliamentary session begin. He highlighted the importance of the 16th Finance Commission's recommendations and pointed out three major challenges facing the Indian economy, including sluggish private investment and rising inequalities. Ramesh emphasized the need for the budget to address these structural issues to ensure sustainable growth and job creation. As the budget date approaches, state governments are increasingly anxious about the implications of new cost-sharing formulas that could impact vital programs like MGNREGA.
Jan 12, 2026, 12:51 IST
Jairam Ramesh Expresses Worries About Economic Stability
On Monday, Jairam Ramesh, a senior leader of the Congress party, voiced his concerns regarding the forthcoming central budget, warning that state governments and the broader economy are entering a precarious phase as preparations for the next parliamentary session commence. Following the announcement of the parliamentary schedule, Ramesh took to social media to highlight that the central budget for the fiscal year 2026-27 is set to be unveiled in approximately 20 days. He noted that this budget will inevitably incorporate the recommendations of the 16th Finance Commission, which submitted its report on November 17, 2025.
Ramesh pointed out that these recommendations will cover the period from 2026-27 to 2031-32, addressing the distribution of tax revenues between the center and states, as well as the allocation of this revenue among the states. Highlighting the growing unease among state governments, the Congress leader referenced the new cost-sharing formula introduced in the VB-G RAM G Act, 2025. He expressed that state governments are already deeply concerned about the 60:40 cost-sharing formula mandated by the new law, which he believes could jeopardize the MGNREGA program. He further stated that as the budget approaches, these concerns are likely to intensify.
Ramesh also identified three significant challenges facing the Indian economy. He noted that despite tax cuts and robust profit margins, private sector investment remains sluggish; domestic savings rates have sharply declined, limiting investment capacity; and inequalities in wealth, income, and consumption continue to rise. He emphasized that the economy is grappling with numerous challenges, which pose a threat to sustainable development and job creation.
Questioning the government's perspective, Ramesh remarked that it remains to be seen whether the upcoming budget will move beyond "comfortable statistical illusions" to acknowledge economic realities and implement meaningful reforms. He cautioned that the high GDP growth rate, crucial for large-scale job creation, cannot be sustained unless these structural challenges are addressed promptly in the forthcoming budget.