States Watch Closely as Congress Sounds Alarm on Budget Inequalities

Ahead of the Union Budget for 2026-27 and the upcoming Parliament session, the Congress party on Monday, January 12, 2026, voiced serious concerns over fiscal federalism, declining investment rates, and widening inequality. The party warned that the Indian economy is grappling with deep structural challenges that cannot be resolved through what it described as “statistical illusions.”

Congress general secretary Jairam Ramesh highlighted that states would be closely watching the budget for clear signals on the Centre’s approach to fiscal devolution and resource sharing. He emphasized that fair and transparent allocation of resources between the Union and the states remains a critical issue, especially amid ongoing debates over GST compensation, tax-sharing formulas, and central grants.

The party pointed to several worrying trends, including a slowdown in private investment, stagnant real wages for large sections of the workforce, and growing disparities between different regions and social groups. Ramesh stressed that these are not short-term fluctuations but structural weaknesses that require bold policy measures rather than reliance on manipulated data or temporary growth figures.

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The Congress statement comes at a time when the government has frequently highlighted India’s status as one of the fastest-growing major economies and record-high GDP figures. The opposition, however, argues that headline growth numbers mask underlying issues such as jobless growth, rural distress, and uneven development across states.

As the Finance Ministry prepares the Budget, expected to be presented in February 2026, all eyes will be on how the government addresses these concerns, particularly the demands for greater fiscal autonomy for states and targeted measures to tackle inequality. The Congress has called for a budget that prioritizes equitable growth, strengthens federal cooperation, and focuses on real economic revival rather than optics.

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