Budget must tackle investment slump, rising inequality: Jairam

Congress general secretary and Rajya Sabha MP Jairam Ramesh on Monday flagged deepening economic stresses and said the forthcoming Union Budget must move beyond what he termed “statistical comfort zones” to address sluggish investment, falling household savings and widening inequality.

In a post on X after the government announced the schedule for the next session of Parliament beginning January 28, Jairam noted that the 2026–27 Budget would be presented in about three weeks. He said the Budget was expected to reflect the recommendations of the 16th Finance Commission, which laid down the framework for sharing tax revenues between the Centre and the states for the period 2026–27 to 2031–32.

Jairam said that states were already anxious about the fiscal direction being taken by the Centre, citing the new 60:40 cost-sharing formula introduced under the law that replaced MGNREGA. He said the shift had heightened concerns among state governments about shrinking fiscal space, even as pressures on welfare spending continue to rise.

The Congress leader said that private corporate investment had remained weak despite cuts in corporate tax rates and healthy profit margins.

He also pointed to a sharp decline in household savings, warning that the trend directly constrained the economy’s capacity to generate investment and sustain medium-term growth.

Further, Jairam said wealth, income and consumption inequalities were steadily rising. He argued that these disparities were no longer peripheral concerns but central economic risks that threatened social stability as well as growth.

Box: Govt has anti-poor mindset: Kharge

Congress president Mallikarjun Kharge on Monday said that the restructuring of MGNREGA into the VB-G RAM G Act undermined the original intent of the rural employment scheme.

Addressing party workers in Bengaluru, Kharge said that the Congress’s nationwide agitation, ‘MGNREGA Bachao Sangram’, launched on January 10 and scheduled to continue until February 25, was aimed at resisting what the party views as an assault on rural livelihoods.

He alleged that the government’s approach reflected an anti-poor mindset and weakened a programme that had served as a critical safety net for rural households.