Congress leader Jairam Ramesh. File
| Photo Credit: ANI

Continuing its attack on the economic policies of the Narendra Modi government ahead of the first budget of the NDA government on July 23, the Congress on Wednesday said that “India has been locked into a cycle of low investment since 2014” due to a combination of “erratic policy, rampant cronyism, and the ED/IT/CBI raid raj”. The party said the country needs a new liberalised approach to political economy.

Congress general secretary (communications) Jairam Ramesh said the single most important statistic that explains India’s inability to grow faster since 2014 is the “sluggish investment rate”.

“India has been locked into a cycle of low investment since 2014, due to a combination of erratic policy, rampant cronyism, and the ED/IT/CBI raid raj,” Mr. Ramesh said in a statement.

Low investment drags down the medium and long-term GDP growth rates, which in turn brings down wages and consumption growth, he said.

The biggest component of investment, Mr. Ramesh said, the private domestic investment, has been in doldrums since 2014. In comparison to the UPA years, when the investment was in the 25-30% range of the GDP, it has been reduced to 20-25% of the GDP range, he said.

“This is, however, only part of the story. Since at least 2016, multinational companies across the world have been looking to divest from China and invest in other developing countries. India, with a large and growing labour pool, was at the right place at the right time – but this generational opportunity to garner FDI and become a manufacturing and export-oriented economy has been squandered,” Mr. Ramesh said.

Instead of India, Bangladesh and Vietnam have capitalised and have walked away with the benefits, he said. “Sops like corporate tax cuts and PLIs can’t compensate for a freer society, polity, and economy – one that is free from demonetization-like masterstrokes, cronyism, and Raid Raj,” Mr. Ramesh said. Marginal policy tinkering will not work, he said.

Congress general secretary Jairam Ramesh. File
| Photo Credit: PTI

The Congress on July 12 said the forthcoming Budget must address fundamental questions such as why private investment is “very sluggish” and private consumption is not picking up as the party dismissed claims that economic growth is accelerating sharply and large numbers of jobs being created.

Union Finance Minister Nirmala Sitharaman is scheduled to present the Budget for 2024-25 in the Lok Sabha on July 23.

Congress general secretary, in-charge communications, Jairam Ramesh said, “The non-biological PM’s cheerleaders and drumbeaters claim that economic growth is accelerating sharply and that jobs are being created in large numbers. But if this was the case — and it is not — Why is private investment, a key engine of economic growth, still so very sluggish recording a 20-year low during April-June 2024? Why is private consumption, another key engine of economic growth, not picking up except at the high end,” Mr. Ramesh asked.

“Why have household savings plummeted to record lows and household debt shot up to record highs? Why have rural wages continued to fall and why is the wage share of national income declining?” he said, adding, why is manufacturing as a share of GDP at a record low and still decreasing? Why has the informal sector lost 17 lakh jobs in the last seven years? Why did unemployment reach a 45-year peak, with unemployment for young graduates at 42%?” the Congress general secretary said.

“These are fundamental questions that the forthcoming Budget will have to address while the Finance Minister sings praises of the non-biological PM,” Mr. Ramesh said.

On Thursday, the BJP claimed that around 12.5 crore jobs were created in the last 10 years of the Modi government and cited the latest Reserve Bank of India report to assert the creation of “five crore jobs in 2023-24 alone”.

Several experts have urged the government to provide tax relief to the common man to boost consumption and take steps to check inflation and accelerate economic growth.

The economy has recorded a growth rate of 8.2% in 2023-24. Earlier in February, Ms. Sitharaman presented an Interim Budget for 2024-25 in view of the Lok Sabha elections.

Congress General Secretary Jairam Ramesh. File
| Photo Credit: ANI

The Congress on October 23 charged that the gap between the ultra-rich and the middle class in the country is widening under the Modi government.

Congress general secretary Jairam Ramesh said an analysis of the publicly available data on income tax returns for the period 2013-14 to 2021-22 confirms one of the essential themes of the Bharat Jodo Yatra — that of increasing income inequality.

“The widening gap between the ultra-rich and the middle class under the Modi government is more and more apparent,” he said in a post on X.

“Here’s the proof: The top 1% of income tax payers made 17% of all income in 2013-14. By 2021-22, the top 1% made 23% of all income. “Further, the income growth of the ultra-rich was much faster than for the middle class. The top 1% of income tax payers saw their income grow at 13% year-on-year from 2013-14 to 2021-22 — a massive 60% faster than the income of the lowest 25% of tax payers,” the Congress leader claimed.

Mr. Ramesh said after adjusting for inflation, the lowest 25% tax-payers actually took home less real income in 2022 than in 2019.

“Gross income of the lowest 25% fell by 11%, from ₹3.8 lakh crore in FY19 to ₹3.4 lakh crore in FY22. Meanwhile, the real income of the top 1% jumped 30% from ₹7.9 lakh crore in FY19 to ₹10.2 lakh crore in FY22. “Figures don’t lie. Only the Prime Minister does,” he alleged.

The Congress has been alleging that income disparity between the rich and the poor has been growing in the last few years.

Jairam Ramesh. File
| Photo Credit: ANI

The Congress on October 19 urged the Securities and Exchange Board of India (SEBI) to stand firm and finish its investigation into the Adani matter in a timely manner, even as it reiterated that only a JPC probe can investigate the full scope of the issue.

In a post on X, Congress general secretary Jairam Ramesh cited a media report which claimed that the SEBI has asked the Organized Crime and Corruption Reporting Project (OCCRP) to give it access to key documents about the allegations of stock manipulation and accounting fraud against the Adani Group.

“Recently, the Organised Crime & Corruption Reporting Project (OCCRP) found clinching evidence that Adani associates were controlling opaque shell companies in overseas tax havens that had amassed huge stakes in Adani Group companies. All this was done in blatant violation of SEBI regulations,” Mr. Ramesh said. “Major global papers such as the Financial Times and the Guardian covered the story in detail,” he pointed out.

“The Adani Group and its minions in the BJP attempted to discredit OCCRP as ‘Soros-funded interests’. Now, it emerges that SEBI itself had approached OCCRP to get access to the documents proving that Adani was in fact indulging in round-tripping and money-laundering benami funds,” Mr. Ramesh said. “Will Adani apologists attack SEBI as conspiring with Soros? Does this not prove that SEBI is finally taking these disclosures seriously and attempting to fulfill its duty to the nation,” he said.

“We urge SEBI to stand firm and finish its investigation in a timely manner. However, we reiterate that only a JPC can investigate the full scope of the Adani MegaScam, including the close and enduring relationship, financial or otherwise, between the PM and his friend Adani,” Mr. Ramesh said.

The Opposition party has been questioning the financial dealings of billionaire Gautam Adani’s Group after the U.S. research firm Hindenburg alleged “irregularities” and charged it with stock price manipulation.

The Adani Group has denied all the allegations made in the Hindenburg report and claimed there had been no wrongdoing on its part.

Senior Congress leader Jairam Ramesh. File
| Photo Credit: The Hindu

The Congress on September 14 alleged that the “Adani scam” has exposed the role tax havens play in hiding large-scale violation of Indian laws and said the issue should have been discussed at the recent G20 Summit.

It also said that if a Joint Parliamentary Committee (JPC) probe is ordered into the allegations against the Adani Group, it will have to make sure that any loopholes for round-tripping and money-laundering are effectively shut.

In a post on X, Congress general secretary Jairam Ramesh said the rise in Indian outward direct investment in the past 25 years has been a sign of deepening globalisation.

“However, it is disturbing that offshore tax havens such as Bermuda, Jersey and Cyprus rank among the top 10 destinations for Indian investment, according to the RBI,” he said.

“This is in addition to Mauritius that has long been suspected as a preferred destination for Indian money-laundering and round-tripping,” the Congress leader noted.

“The Adani MegaScam has exposed the critical role such tax havens play in hiding the large-scale violation of Indian laws and regulations. These violations are hollowing out our economy and affecting the credibility of our stock markets,” Mr. Ramesh said.

“The G20 was the right forum to take up this issue and ensure concrete action against tax havens. But the Prime Minister was busy projecting his own image rather than protecting India’s interests,” he claimed.

“A JPC into the Adani MegaScam will have to make sure that any remaining loopholes for round-tripping and money-laundering are effectively shut,” the Congress leader said.

The Congress and other Opposition parties have been demanding a JPC probe into the Adani issue and will take up the issue during the upcoming special session of Parliament from September 18 to 22.

U.S. short-seller Hindenburg Research, in a report released on January 24, alleged accounting fraud, stock price manipulation and use of tax havens by the Adani Group, triggering a stock market rout. The Adani Group has denied all allegations by Hindenburg.