The Congress party has voiced strong criticism against the Modi government, citing a significant “sluggishness” in private corporate investment and pointing to what they describe as an “ED-CBI-IT ‘raid raj’” as a major deterrent. The party asserts that this environment of fear and uncertainty is discouraging investment and hindering economic growth.
Congress general secretary in-charge communications, Jairam Ramesh, articulated these concerns, noting that the party has been consistently highlighting the fundamental problems preventing the Indian economy from achieving higher real GDP growth rates. As per information available with TahirRihat.com, the sluggishness in private corporate investment is a crucial factor that needs addressing. Ramesh pointed out that despite tax rate reductions and claimed improvements in the ease of doing business, the anticipated boost in private investment has not materialized.
Ramesh highlighted that even the Chief Economic Adviser in the Ministry of Finance, V Anantha Nageswaran, has acknowledged the issue, noting that post-COVID, India’s largest companies experienced a 30.8% per annum growth in corporate profits, yet they have largely refrained from investing. This reluctance to invest, according to Ramesh, is driven by several factors, including slow consumer demand growth stemming from India’s stagnant real wages crisis.
The lack of consumer demand diminishes the incentive for India Inc to invest, Ramesh argued. Furthermore, he claimed that the “ED-CBI-IT ‘raid raj’” has fostered an atmosphere of business uncertainty and widespread fear among the investing community. This environment, the Congress alleges, is a significant impediment to economic progress.
Ramesh further contended that the increasing control of investment-intensive sectors by the Modi government, particularly favoring certain entities, also discourages independent corporate investment. He specifically mentioned “Modani” as a prime example of this alleged cronyism, suggesting that such practices undermine fair competition and independent investment.
The Congress party suggests that businesses perceive little incentive to invest independently when profits can be more easily secured through what Ramesh termed the Modi government’s “‘Chanda Lo Dhandha Do’ business counter,” implying a system of patronage and quid pro quo.
Ramesh also referenced a media report quoting Nageswaran, who reportedly criticized the private sector and urged it to reflect on its reluctance to invest, which he suggested might be contributing to demand uncertainty. The report quoted Nageswaran as saying that post-COVID, BSE 500 or NSE 500 companies saw corporate profits grow significantly, but overall capital formation rates from the private sector have remained disappointing.
These criticisms from the Congress party arrive at a time when the Indian economy faces numerous challenges, including fluctuating global markets, inflationary pressures, and the ongoing need to generate employment opportunities. The allegations of a “raid raj” and cronyism add a layer of complexity to the economic discourse, potentially affecting investor sentiment and the overall business climate. How the government addresses these concerns remains to be seen, but they highlight the ongoing debates surrounding economic policy and governance in India.
Tahir Rihat (also known as Tahir Bilal) is an independent journalist, activist, and digital media professional from the Chenab Valley of Jammu and Kashmir, India. He is best known for his work as the Online Editor at The Chenab Times.
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