NEW DELHI: The Congress party on Thursday asserted that the Modi government is operating in a state of panic and is facing internal pressure concerning the country’s economic performance, highlighting that tepid private corporate investment remains a significant challenge.
Information was available with The Chenab Times that Jairam Ramesh, a senior Congress leader, pointed to a media report suggesting the central government is contemplating an ordinance to amend the Income Tax Act. This proposed amendment aims to completely abolish the 12.5% long-term capital gains tax on investments made by foreign portfolio investors (FPIs) in Indian government securities.
Ramesh, addressing the issue via the social media platform X, stated, “The Modi government is clearly in panic mode and is under siege from within its ecosystem on the current economic situation.” He elaborated on the reported plan, noting that this tax rate was initially established in the Union Budget of July 2024.
The Congress leader argued that the fundamental issue lies in the subdued level of private corporate investment within India. He observed that entities capable and expected to invest domestically are either diverting funds abroad or delaying their investments within the country. Ramesh, who serves as the Congress general secretary in charge of communications, further commented that while corporate earnings are at record highs, the proportion of private corporate investment as a percentage of GDP has notably declined.
He criticized such measures as “band-aid ordinances,” suggesting they might generate headlines but do not adequately address the underlying structural reasons for the depressed rates of private corporate investment. According to Ramesh, these structural causes include the stagnation of real wages, the widening gap in income and wealth inequality, the increasing concentration of economic power across various sectors, and an atmosphere of intimidation fostered by the alleged misuse of investigative agencies.
Adding another layer to the economic concerns, the Congress leader also noted that the continued growth of imports from China has exacerbated domestic investment challenges.
The Chenab Times News Desk