Thu Mar 06 07:57:05 UTC 2025: ## Congress Criticizes Modi Government’s Economic Policies, Citing IMF Report

**New Delhi, March 6, 2025** – Congress leader Jairam Ramesh today slammed the Modi government’s economic policies, citing a new International Monetary Fund (IMF) report that highlights sluggish private investment growth in India. Ramesh, citing the IMF’s Article IV Consultation Report, stated that the report implicitly criticizes the government’s approach.

The report reveals that private corporate investment growth has significantly slowed, dropping from 21% in 2022/23 to 13% in 2023/24. Investment in machinery and equipment, crucial for expanding production capacity, has also fallen consistently as a percentage of GDP. Capacity utilization in manufacturing reached only 75.8% in July-September 2024, with firms expecting sufficient capacity to meet demand in the coming months. This reflects a broader slowdown in consumption growth, according to Ramesh.

The Congress leader further highlighted the IMF’s concerns regarding India’s declining share in global Foreign Direct Investment (FDI), falling to about 2% in 2023 from 6.5% in 2020. He attributed this partly to the government’s allegedly incoherent trade policy, characterized as favoring China while employing protectionism against other nations. This, Ramesh argued, leaves India vulnerable to both retaliatory protectionism and Chinese dumping.

The IMF also noted a rise in agricultural employment and self-employment, indicating a decline in the quality of jobs and a divergence from the typical development path of labor shifting towards industry and services. Ramesh blamed this on government policies such as demonetization and the flawed implementation of the Goods and Services Tax (GST).

Ramesh proposed a three-pronged approach to revive the economy: boosting mass consumption and real wage growth; enhancing policy predictability and reducing “tax terrorism”; and reforming trade policy to protect against Chinese dumping and integrate better with global value chains. He concluded that the government’s failure to address fundamental economic issues and its focus on a few politically connected businesses have contributed to the current economic slump.

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