The government is "good owners of programmes but incompetent managers", he said.
Referring to the Economic Survey, he said some of the flagship programmes such as Swachh Bharat, Rural Electrification and LPG distribution are yet to produce tangible and measurable outcome.
Toilets were built under the Swachh Bharat scheme, but they lacked water connection and waste disposal system, he said, citing reports.
"Nobody is questioning the intentions of the government or the prime minister. I am sure the intentions are good. But what it proves is while they (government) are good owners of the programme, they are very incompetent managers of programmes.
"If you want to have toilet programme to be implemented, you must have a competent manager," the former finance minister said at Manthan, a forum that promotes public discussions.
On the Union Budget, Mr Chidambaram said it failed to address the issues of farmers, youth and education.
The Budget also failed the test of fiscal consolidation, he said.
Indian economy has "decoupled" from the rest of the world, and the Narendra Modi Government was very late to notice the decline of growth rate, Mr Chidambaram said.
"The government is whistling in dark. It has become intolerant, and as a result the voices (of concern or dissent) are not heeded. If you don't listen or heed voices, nobody is going to tell you the truth," he said.
To a question, the former finance minister said people of the country may not accept privatisation of all public sector banks.
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