End ‘tax terrorism’: Congress to government ahead of Union budget 

The Congress on Sunday (January 19, 2025) said that “raid raj and tax terrorism” that had converted “ease of doing business” to “unease of doing business” should be eliminated. 

Congress general secretary (communications) Jairam Ramesh in a statement on Sunday said that action should be taken to protect Indian manufacturing jobs, and decisive steps needed to be taken to shore up wages and purchasing power, which in turn would incentivise Indian businesses to invest. 

“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’,” Mr. Ramesh said.

He pointed out that private domestic investment, which was in the range of 25%-30% under the late Manmohan Singh’s government, in the last 10 years had come down to 20%-25% of GDP. “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. An estimated 21,300 dollar millionaires left India between 2022 and 2025,” Mr. Ramesh said. 

He attributed three reasons for the slump. The first among them, he said, was complicated GST, which today had up to 100 different tax rates, including cesses. “The multiplicity of rates and confusion has facilitated alarming GST evasion of ₹2.01 lakh crore, almost double the ₹1.01 lakh crore reported in FY23. 18,000 fraudulent entities have been uncovered; many more are likely undetected,” Mr. Ramesh said. 

Secondly, Chinese imports into India continued unabated, with a record trade deficit of $85 billion in 2023-24. This, Mr. Ramesh said, had damaged Indian manufacturing, especially in labour intensive sectors.

The third reason was weak consumption due to stagnant wages, he said. “According to Ministry of Agriculture data, real wages for agricultural labour grew 6.8% per year under the UPA [United Progressive Alliance], and declined 1.3% 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,” Mr. Ramesh said. 

These retrograde policies, he said, had 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. Nothing less will do,” Mr. Ramesh said.