New Delhi, June 1 (IANS): The Congress on Monday criticised the increase in service tax to 14 percent, saying it was "unwarranted" and "regressive".

"Beginning today (Monday), we are all going to be paying a higher and unwarranted service tax increase to 14 percent," Congress spokesperson Rajeev Gowda told the media.

"This increase in service tax affects all sections of society. It is regressive and hurts the poor. This is a gift from the Modi government on completion of one year," he said.

Finance Minister Arun Jaitley in his budget had proposed to raise service tax from 12.36 percent (including education cess) to 14 percent. The tax is levied on all services, except a small negative list.

Gowda said Prime Minister Narendra Modi was unaware of the economy of the country.

"There was a massive initiative by the UPA and this has made the Indian economy the third largest in the world," Gowda said.

He said the agriculture sector in the country has slowed down to 1.1 percent due to the wrong policies of the government like not increasing the Minimum Support Price (MSP) and reduced spending on the MGNREGS.

"This coupled with the massive social sector cuts has reduced the buying power of the rural masses bringing down inflation but bringing up poverty levels in villages," he said.