‘Investment slowdown and weak demand deepening crisis’: Congress targets Centre over economy

The Congress on Thursday mounted a sharp attack on Narendra Modi government, alleging that falling private investment, weak consumer demand and policy uncertainty had pushed the Indian economy into a difficult phase that was now causing concern even among the government’s traditional supporters.

In a statement issued on Thursday, Congress general secretary in charge of communications Jairam Ramesh claimed that economic sentiment had deteriorated significantly in recent months. “The sentiment on the Indian economy has taken such a downturn that even the Modi Govt’s professional cheerleaders have begun to give public expression to their concerns,” he said.

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He alleged that expectations of inflation were rising while growth projections were slowing, adding that foreign direct investment continued to weaken. Ramesh also accused the government of mishandling supply chains, claiming the situation had become so severe that the Prime Minister himself had urged consumers to cut down on consumption.

According to the Congress leader, the biggest challenge facing the economy was the sluggish pace of private investment, which he described as critical for sustaining long-term economic growth.

He argued that stagnant real wages had weakened consumer demand across income groups, discouraging companies from expanding or making fresh investments. “In the absence of consumer demand, there is no incentive for India Inc to invest,” he said.

The Congress also accused the government of creating an “atmosphere of fear and business uncertainty” through what it described as policy flip-flops, administrative interventions, tax notices and raids by investigative agencies.

The Opposition party further alleged that cheap imports from China had adversely affected domestic manufacturing and criticised what it called the increasing concentration of economic power in the hands of a few large business conglomerates. “Modani is the shining example of this cronyism,” Ramesh said, using an Opposition-coined term referring to the alleged proximity between the government and certain industrial groups.

The statement also targeted the government’s electoral funding framework, alleging that corporates were finding it easier to secure profits through political proximity rather than taking independent investment risks. Referring to the Opposition’s criticism of political funding practices, Ramesh said businesses were benefiting from a “Chanda Lo Dhandha Do” system.

The Congress leader noted that despite historically low corporate tax rates and strong company earnings, actual investment activity had failed to gather pace. “Grand investment announcements continue to get made but how many of these intentions get converted into actual assets on the ground is open to serious question,” he said.

Taking a swipe at Prime Minister Modi, Ramesh accused him of focusing more on image-building exercises than addressing deeper economic concerns.

“The Prime Minister is busy distributing toffees and engaging in pious pleas to the public. The ground is slipping beneath the country’s feet,” he said.

Calling for sweeping changes in economic policymaking, the Congress leader said the government had “run out of ideas” and needed a “radical reset” to revive investment and economic growth.

The remarks come amid an intensifying political debate over inflation, unemployment, private sector investment and slowing global economic conditions, issues expected to figure prominently in upcoming political campaigns and parliamentary discussions.