Modi government has ‘run out of ideas’ on economy, says Congress, calls for a policy reset

The Congress on Thursday (May 21, 2026) said the Narendra Modi government had “run out of ideas” on economic policymaking and called for a “radical reset”, alleging that worsening economic indicators and declining investor sentiment reflected deep structural problems in the economy.

“The Prime Minister is busy distributing toffees and engaging in pious pleas to the public. The ground is slipping beneath the country’s feet,” Congress communication chief Jairam Ramesh said in a statement.

Mr. Ramesh also took an apparent dig at the government’s political management, remarking that while “the Prime Minister is managing elections through Gyanesh”, he “urgently needs new Gyan on the economy.”

The Congress leader claimed that sentiment surrounding the Indian economy had deteriorated to the extent that even what he termed the government’s “professional cheerleaders” had begun expressing concern publicly. He alleged that inflation forecasts were rising while growth projections were declining, foreign direct investment continued to shrink and supply chains had been “gravely mismanaged”.

According to Mr. Ramesh, the Congress had consistently raised concerns about the investment climate and the inability of private investment to gather momentum. He argued that sustained economic growth would not be possible without a significant increase in private investment.

Listing what he described as the reasons for sluggish investment, Mr. Ramesh cited stagnation in real wages leading to subdued consumption demand, an atmosphere of fear and uncertainty caused by policy “flip-flops”, tax notices and raids, and the impact of continued “dumping” of imports arising from China’s industrial overcapacity.

He further alleged that growing concentration of ownership had been aided by “government-enabled takeovers” benefiting the Prime Minister’s “closest friends”. Referring to alleged cronyism, he said, “Modani is the shining example of this.”

Mr. Ramesh also criticised what he called the “Chanda Lo Dhandha Do” model, alleging that companies had little incentive to invest independently when profits could be secured through proximity to the government.

The Congress leader noted that although corporate tax rates were at record lows and corporate earnings remained high, investment momentum was “conspicuously absent”. He questioned how many large investment announcements were eventually converted into assets on the ground and claimed that increasing numbers of investors were relocating or investing abroad.