New Delhi

The Congress on Thursday claimed the Modi government is in "panic mode" and "under siege" from within its ecosystem on the current economic situation, asserting that the real problem is that private corporate investment is very tepid within the country.

Congress leader Jairam Ramesh cited a media channel claim that the Centre is planning to issue an ordinance amending the Income Tax Act to completely eliminate the 12.5% long-term capital gains tax on investments made by foreign portfolio investors (FPIs) in Indian government securities, as he attacked the government.

"The Modi government is clearly in panic mode and is under siege from within its ecosystem on the current economic situation," Ramesh said on X.

According to a news flash by a TV channel that is plugged into the ruling establishment, the Modi government is planning to issue an ordinance amending the Income Tax Act to completely eliminate the 12.5% long-term capital gains tax on investments made by foreign portfolio investors (FPIs) in Indian government securities, he said.

This rate was fixed in the Union Budget of July 2024, Ramesh pointed out.

He claimed the "real problem" is that private corporate investment is very tepid within India.

Those who can and must invest in India are either investing abroad or postponing investments at home, the Congress general secretary in-charge communications said.

"Corporate earnings are at record highs, but yet the rate of private corporate investment as a % of GDP has actually declined in a marked manner. Band-aid ordinances may provide headlines but are no substitute for addressing the structural causes of depressed rates of private corporate investment," Ramesh said.

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These include stagnation in real wages, sharpening income and wealth inequalities, ever-increasing concentration of economic power in sector after sector, and an intimidatory atmosphere created by the misuse of investigative agencies, he added.

"Allowing imports from China to keep growing has only added to domestic investment woes," the Congress leader said.