Congress says Centre in ‘panic mode’ on economy, raises questions over LIC stake in firm under SEBI scanner

The Congress on Thursday, June 4, 2026, claimed that the Narendra Modi-led Union government is in “panic mode” over the state of the economy, citing reports that it is considering the removal of 12.5% ​​tax on long-term capital gains to stop the withdrawal of foreign portfolio investors (FPIs) from Indian markets.

The party also raised questions over Life Insurance Corporation of India’s (LIC) investment in jewelery and gold refining company Rajesh Exports, which is facing regulatory action by the Securities and Exchange Board of India (SEBI).

Congress general secretary (communication) Jairam Ramesh cited media reports claiming that the Center is considering an ordinance to amend the Income Tax Act and remove the 12.5% ​​long-term capital gains tax (LTCG) on investments in government securities by FPIs.

‘Under siege’

“The Modi government is clearly in panic mode and is under siege from its ecosystem due to the current economic situation,” Mr. Ramesh said in a post on X, adding that the tax rate has been fixed in the July 2024 Union Budget.

Arguing that the economic difficulties in the country are getting deeper, the Congress communications chief said that the “real problem” is the weakness of private corporate investments.

“Those who can and should invest in India are either investing abroad or postponing investments within the country,” Mr. Ramesh said, adding that corporate profits were at record highs even as the share of private investment in GDP was falling.

structural problems

The congressional leader argued that interim policy measures cannot replace structural problems, which he described as stagnation of real wages, growing income and wealth inequalities, concentration of economic power and an atmosphere of intimidation created by the abuse of investigative institutions. He also blamed rising imports from China for worsening domestic investment concerns.

Separately, it questioned LIC’s nearly 10.8% stake in Rajesh Exports after SEBI issued an interim order alleging gross misrepresentation of financial statements and diversion of funds by the company.

Describing the alleged irregularities as a “massive scam”, Mr Ramesh said the market regulator had pointed to income misrepresentations spanning five years and amounting to up to Rs 15 lakh crore.

“How could LIC overlook such a massive fraud in a company in which it had a significant stake?” he asked, adding that the investment raises questions about whether the acquisition was influenced by “instructions from the ecosystem in power.”

Citing prima facie evidence of large-scale financial irregularities and inadequate cooperation with the investigation, SEBI on Wednesday banned the company’s promoter and chief executive officer Rajesh Mehta from dealing in the firm’s securities until further orders.