S&P threaten to downgrade India’s rating, Pranab rejects report
New Delhi/Mumbai : Global credit rating agency Standard & Poor on Monday threatened to downgrade India’s credit rating citing slow GDP growth and political roadblocks. However Finance Minister Pranab Mukherjee rejected the agency’s report saying that government has full control over the current situation. He expressed confidence that there will be a turnaround in growth prospects in coming month.
In a report, S&P has warned that India may become the first among the BRIC nations (Brazil, Russia, India and China) to lose its investment grade rating. ‘Slowing GDP growth and political roadblocks to economic policymaking are pushing up the risk that India could lose its rating. It will push India down to junk status which could affect foreign capital flows to India. The report, dated June 8 said.
However hours after this news comes, Finance Minister Pranab Mukherjee rubbishes the report. “This (S&P report) is not based on a fresh rating action. S&P had issued India’s sovereign credit rating on April 25 reaffirming the country’s long term sovereign credit rating at BBB(-), although it revised the outlook from negative to stable,” he said in the statement.
Finance Minister said, there were no significant events to indicate that the economy’s vulnerability to shocks have increased though growth numbers for the fourth quarter 2011-12 were below expectations.