Modi govt converted ease of doing business to unease in doing business: Congress

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.

New Delhi: Insisting that "retrograde policies" have broken the confidence of investors in India, Congress on Sunday urged Narendra Modi government to take steps to eliminate "raid raj and tax terrorism" in the Union Budget to be presented in 13 days from now.

Congress General Secretary (Communications) Jairam Ramesh said the government should 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, he said in a statement.

Claiming that the government has "converted the ease of doing business to unease in doing business", he said, "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.

Citing statistics from the Manmohan Singh era where private domestic investment was 25-30 per cent of the GDP, which has "collapsed" to 20-25 per cent during the Modi regime, he said 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 and an estimated 21,300 dollar millionaires left India between 2022 and 2025, he said, claiming that it is because of a "complicated" GST, continuing Chinese imports damaging the manufacturing sector and weak consumption growth.

"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," he said.

Quoting former Chief Economic Advisor Arvind Subramanian, he said the GST which was proclaimed to be a "Good and Simple Tax" has gone up to a 100 different tax rates, including cesses.

"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 adding, 18,000 fraudulent entities have been uncovered and many more are likely undetected.

Referring to the "record" trade deficit of $85 billion with China, he said it has damaged Indian manufacturing, especially in labour intensive sectors.

He also said, "Weak consumption and stagnant wages have reduced India's consumption growth despite the free availability of personal debt."

Citing Ministry of Agriculture and Farmers' Welfare data, he said that the 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.

Periodic Labour Force Survey (PLFS) data show that average real earnings stagnated between 2017 and 2022 across all workers -- salaried, casual and self-employed, he added.