India needs radical reset in economic policy-making; Modi govt has run out of ideas: Congress

New Delhi: The Congress on Thursday voiced concern over the state of the economy and alleged that Prime Minister Narendra Modi is "managing elections through Gyanesh" but needs "new Gyan" on the economy.

Congress general secretary in-charge communications Jairam Ramesh said the sentiment on the Indian economy has taken such a downturn that even the Modi government's professional cheerleaders have begun to give public expression to their concerns.

"Inflation forecasts are sharply up while growth projections are appreciably down. FDI continues to shrink and supply chains have been so gravely mismanaged that the Prime Minister has now gone on record asking consumers to reduce their consumption," he said.

"There is nothing new about these concerns. The Indian National Congress has been voicing them for some time, the most important of which relates to the tepid investment climate," he said in a statement.

Referring to the prime minister gifting toffees to Italian Premier Giorgia Meloni, Ramesh said the prime minister is busy distributing toffees and engaging in pious pleas to the public.

"The ground is slipping beneath the country's feet. We need a radical reset in economic policy-making, but the Modi Government has run out of ideas - other than the usual self-glorification.

"The PM is managing elections through Gyanesh but urgently needs new Gyan on the economy," the Congress leader alleged, in a reference to Chief Election Commission Gyanesh Kumar.

He said economic growth cannot be accelerated and sustained at higher levels, as indeed it must, without a significant increase in the rate of private investment.

"This rate of private investment has not moved ahead because real wages have been stagnating thereby suppressing growth in consumption across income categories. In the absence of consumer demand, there is no incentive for India Inc to invest.

"Prevailing atmosphere of fear and business uncertainty in the investment community caused by policy flip-flops, administrative orders, tax notices, raids and threats of raids by tax authorities and investigative agencies," he noted.

Ramesh said continued 'dumping' of imports from China's industrial over-capacity has wrecked demand for local goods across the manufacturing sector.

"Growing concentration of ownership, aided by government-enabled takeovers by the PM's closest friends. Modani is the shining example of this cronyism," the Congress leader said.

"Little incentive for corporates to invest independently and accept the risk that comes alongside it when profits can be successfully reaped from making a payment to the Modi Government's 'Chanda Lo Dhandha Do' business counter," he alleged.

Noting that corporate India's tax rates are at record lows and its earnings are at record highs, he said, stock market valuations appear buoyant.

"Yet, investment momentum is conspicuously absent and those who are in a position to invest are relocating and/or investing abroad in increasing numbers.

"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," the Congress leader said.