Modi govt's policies, corporate tax cuts failed to revive economy: Cong

Asserting that the Centre's policies have "failed" to revive the economy, the Congress on Thursday said the government's strategy of cutting corporate taxes, giving "generous corporate handouts" and raising the tax burden on the salaried middle class has only helped enrich large monopolies without any discernible increase in investment or hiring.

Congress general secretary in-charge communications Jairam Ramesh said what is needed for stimulating demand is tax cuts for the salaried middle classes and income support to the poor.

His remarks came over a media report which claimed that the sharp slump in economic growth rate to 5.4 per cent in July-September this year has sparked concerns among policy makers that low single-digit income growth in the corporate sector despite four times growth in profits over the last four years, is one of the reasons behind the slowing of demand.

 

In a post on X, Ramesh said, "Private sector profit is at a 15-year-high and has grown four times over the last four years. But salaries are stagnant, having grown annually at rates between 0.8% and 5.4% across sectors."  The CEA has sagely suggested that India Inc needs to look within and that "there has to be better balance between the share of income going to capital as profits and that going to workers as wages", Ramesh said.

If only the Government had not cut corporate taxes steeply in 2019, some of that balancing could have been achieved through policy itself, he said.

"The writing on the wall is clear: the Government's strategy of cutting corporate taxes, giving generous corporate handouts through PLIs, and raising the tax burden on the salaried middle class has only helped enrich large monopolies without any discernible increase in investment or hiring," Ramesh said.

These policies have failed to revive the economy, he claimed.

"What we need to stimulate demand is tax cuts for the salaried middle classes and income support to the poor," Ramesh said.

The Congress has been accusing the government of mishandling the economy and criticising it over rising prices, unemployment and "stagnant incomes".