S&P rating a timely warning: Pranab

Terming Standard and Poor’s decision to lower India’s credit rating outlook to negative as a “timely warning”, Finance Minister Pranab Mukherjee on Wednesday said there is no need to panic as the government is committed to economic reforms.

“I am concerned but I don’t feel panicky because I am confident that our economy will grow at 7 per cent, around 7 per cent if not plus. We will be able to control fiscal deficit and it will be around 5.1 per cent”, he told reporters. The Minister, however, said that government will take note of the S&P’s decision to lower India’s rating outlook to BBB — (the lowest investment grade rating) and work for achieving higher economic growth. “So economic reforms will be on track. The reform process and necessary administrative decisions required to ensure that fiscal deficit is retained at projected level (will be taken). “We should continue to work for higher GDP... We will take note. It is a timely warning”, the Minister said.

Union Law and Justice MinisterSalman Khurshid also played down the global agency Standard and Poor's (S&P) rating for India, saying he was confident that the country would get out from the economic slowdown crisis and the economic conditions would significantly improve.
"We have been through difficult times. We have, I think we have weathered the storm, can't say that the whole world has yet weathered the storm but I think we have weathered the storm and I think that's now becoming apparent in decisions that are being taken by the Reserve Bank and the decisions that are being taken by the Finance Ministry," said Khurshid.

Meanwhile, Communist Party of India (Marxist) leader Sitaram Yechury said that he was not surprised by S&P ratings, as the Central Government had failed to curb price rise and did not generate employment opportunities for the common masses.

"I am not surprised that the estimations about India's growth is further declining because we have been arguing not now but for the last three to four years since the global recession began that India can sustain its high growth only on basis of increasing domestic demand, only be empowering our own people," said Yechury.

"By increasing the domestic demand, we will have a healthy sustainable growth cycle but the government is dong exact opposite. They are creating avenues for greater profit for certain people but for the masses of Indians their purchasing powers are continuously being eroded by this price rise and by lack of employment opportunities," he added.

Bharatiya Janata Party (BJP) leader Jaswant Singh said the fiscal and current account deficit is a matter of concern.

" Inflation especially food inflation is another matter of grave concern. Apart from that we are not able to have economic development, as we are not receiving any money from foreign countries. So, the economic index of the country is not very encouraging," he said.

Global agency Standard and Poor's (S&P) had lowered India's rating outlook to negative and warned of a downgrade in two years if there is no improvement in the fiscal situation and the political climate continues to worsen.

- Asian Tribune =

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