Modi govt in ‘panic mode’ over economy, says congress

In a statement, Congress general secretary in charge of communications, Jairam Ramesh, referred to media reports suggesting that the Centre was considering an ordinance to amend the Income Tax Act and remove the 12.5 per cent long-term capital gains tax on investments made by foreign portfolio investors (FPIs) in Indian government securities.

 “The Modi Govt is clearly in panic mode and is under siege from within its ecosystem on the current economic situation,” Ramesh said.

 Citing a television news report, he claimed that the government was planning to promulgate an ordinance to completely eliminate the tax on long-term capital gains earned by FPIs from investments in Indian government securities. The 12.5 per cent rate had been fixed in the union Budget presented in July 2024, he noted.

 The Congress leader argued that such a move, if implemented, would not address what he described as the core challenge facing the economy — weak private corporate investment. According to him, despite corporate earnings reaching record highs, domestic private investment has remained subdued, with the rate of private corporate investment as a percentage of GDP witnessing a noticeable decline.

 “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,” Ramesh said.