The Congress on Sunday claimed that the Modi government's “retrograde policies†have broken the confidence of investors in India and converted the ease of doing business to “unease in doing businessâ€.
Ahead of the Union Budget, the opposition party said that to fix this, the upcoming budget must eliminate “raid raj and tax terrorismâ€.
It also called on the government to take action to protect Indian manufacturing jobs and take decisive action to shore up wages and purchasing power.
Congress general secretary in-charge communications Jairam Ramesh said the Modi government has long proclaimed its desire to improve the "ease of doing business" in India but yet in the past decade "we have only seen an easing of private investment which has fallen to record lows and the easing out of businesspersons who have departed India in large numbers for foreign shores".
"A byzantine, punitive, and arbitrary tax regime covering both GST and income tax - which amounts to sheer Tax Terrorism -is now the greatest threat to India's prosperity and has contributed to an 'unease of doing business'," he said in a statement.
The biggest component of investment - private domestic investment has been weak since 2014, Ramesh said, adding that it was solidly in the 25-30 per cent of GDP range during Manmohan Singh's tenure as PM.
"In the last ten years, it has collapsed to the 20-25 per cent of GDP range. This sluggish investment has been accompanied by a mass exodus of high-net-worth individuals. More than 17.5 lakh Indians have acquired the citizenship of another country over the past decade," he said.
An estimated 21,300 dollar millionaires left India between 2022 and 2025, he claimed.
"All this is happening for three reasons. Firstly, a complicated GST. According to former Chief Economic Advisor Arvind Subramanian, the GST which was proclaimed by the PM to be a Good and Simple Tax has up to a 100 different tax rates, including cesses," he said.
The multiplicity of rates and confusion has facilitated alarming GST evasion of Rs 2.01 lakh crore, almost double the Rs 1.01 lakh crore reported in FY23, he said.
Ramesh claimed that 18,000 fraudulent entities have been uncovered with many more likely undetected.
"Secondly, despite claims to the contrary, Chinese imports into India continue unabated with a record trade deficit of $85 billion in 2023-24.This has damaged Indian manufacturing, especially in labour intensive sectors," Ramesh said.
Thirdly, weak consumption and stagnant wages have reduced India's consumption growth despite the free availability of personal debt, he said.
"According to Ministry of Agriculture data, real wages for agricultural labour grew 6.8 per cent per year under the UPA, and declined 1.3 per cent per year under the Modi government," he said.
Citing the Periodic Labour Force Survey data, he said it shows that average real earnings stagnated between 2017 and 2022 across all workers --“ salaried, casual and self-employed.
"These retrograde policies have broken the confidence of investors in India. To fix this, the budget must eliminate raid raj and Tax Terrorism, take action to protect Indian manufacturing jobs and take decisive action to shore up wages and purchasing power, which in turn will incentivise Indian business to invest. Nothing less will do," Ramesh asserted.
Sharing his statement on X, Ramesh said, "The 2025/26 Union Budget will be presented thirteen days from today. Here is our statement on how the Modi Government has converted the ease of doing business to unease in doing business - thereby depressing private investment sentiment. Radical action is necessary to fix the damage."
