"Yes, the Congress party is facing a very serious crisis," Mr Ramesh told news agency Press Trust of India in an interview.
The former union minister considered close to Rahul Gandhi said the party "has to change" and also delivered home truths for leaders who he said behaved as if they were still in power.
"The sultanate has gone, but we behave as if we are sultans still. We have to completely redo the way of thinking, the way of acting, the way of projecting, the way of communicating. I think there is a lot of goodwill for the Congress, a lot of support for the Congress but people want to see a new Congress. They don't want to see old mantras, old slogans. We must recognise this is a big challenge. Huge challenge for us," he said.
Mr Ramesh also called for "a collective effort" to overcome the challenges it faced from Prime Minister Narendra Modi and BJP chief Amit Shah. The "business-as-usual" approach would not work against PM Modi and Mr Shah, he suggested, adding that without flexibility, the party "will become irrelevant, frankly."
The words cut deep just hours before a Congress Working Committee meeting.
Some in the Congress dismissed the words as Mr Ramesh's personal views; others labored to put a positive spin on his critique.
"I think what he meant to say is that we should change our old thoughts, vision, but he didn't say anything about how to bring change," Mr Aiyar said, adding he would ask Mr Ramesh "what he had in mind" once he returned from Kochi.
Mr Ramesh refused to speak further on his comments when reporters circled him in parliament.
Congress spokesperson Randeep Surjewala said, "Whatever Mr Ramesh has said can be his personal views, the Congress does not agree with this."
Denial wouldn't help Congress, advised former Jammu and Kashmir Chief Minister Omar Abdullah. "I hope there are people in the Grand Old Party who sit up and take note of what Jairam Ramesh is saying. Dismissing his views will be shortsighted," he said.