The Congress on Wednesday claimed that India has been locked into a cycle of low investment since 2014 due to a combination of “erratic policy, rampant cronyism, and the ED/IT/CBI raid raj”, and asserted that the country needs a new liberalised approach to political economy.

Ahead of the presentation of the Union Budget next week, Congress General Secretary in charge of communications Jairam Ramesh said the single most important statistic that explains India's inability to grow faster since 2014 is the “sluggish investment rate”.

“India has been locked into a cycle of low investment since 2014, due to a combination of erratic policy, rampant cronyism, and the ED/IT/CBI raid raj,” Ramesh said in a statement.

Low investment drags down the medium and long-term GDP growth rates, which in turn drags down wages and consumption growth, he said.

“The biggest component of investment - private domestic investment - has been in the doldrums since 2014. It was solidly in the 25-30% of GDP range during Dr Manmohan Singh's tenure. Under the self-declared divinity, it has been squarely in the 20-25% of GDP range,” Ramesh said. He said gross FDI as a percentage of GDP has also more or less stayed constant since 2014. “This is, however, only part of the story. Since at least 2016, multinational companies across the world have been looking to divest from China and invest in other developing countries.

“India, with a large and growing labour pool, was at the right place at the right time - but this generational opportunity to garner FDI and become a manufacturing and export-oriented economy has been squandered,” Ramesh said. Countries like Bangladesh and Vietnam have walked away with the benefits, he said.

“Sops like corporate tax cuts and PLIs can't compensate for a freer society, polity, and economy one that is free from demonetization-like masterstrokes, cronyism, and Raid Raj,” Ramesh said, hitting out at the Modi government.'What India needs is not marginal policy tinkering, but a new, liberalised approach to political economy,” the Congress leader said.

Union Finance Minister Nirmala Sitharaman is scheduled to present the Budget for 2024-25 in the Lok Sabha on July 23.