The negative outlook affirmation by S and P for India's BBB- status is unfortunate, Chandrajit Banerjee, Director General of the Confederation of Indian Industry (CII), has said.
Banerjee said that India can move faster on reforms, but what is important to note is that over the last eight months, a number of measures have been taken by the government, through the parliamentary system, and also through notifications, which have clear directional value in terms of reforms, and this is a continuing process.
In the light of that, the rating by S and P appears to be harsh on India, Banerjee said in a statement.
While being concerned about the Current Account Deficit and the Fiscal Deficit, the CII president said that captains of Indian industry were confident that the government would do everything necessary to bring these under control.
"We have seen a strong measure of that coming through the Union Budget itself," he said.
Banerjee's statement came out after the government said that the nation's economy is on right track and that reforms will continue.
Expressing its disappointment over Standard and Poor's (S and P) assessment, the Finance Ministry said the government's fiscal policies are going in the right direction and there is nothing to be worried about.
The response was to Standard and Poor's (S and P)'s warning that it may downgrade India's sovereign rating to junk grade if the government fails to pursue reforms and check deterioration in fiscal and Current Account Deficit.
Commenting on the report, Economic Affairs Secretary Arvind Mayaram said he did not think there was a need to be concerned about the S and P projection or warning.
Chief Economic Adviser Raghuram Rajan also expressed his disappointment over the S and P warning, adding that the latter has not seen it fit to improve its outlook for India, especially when the agency acknowledges the important steps taken by the Government in recent months.
He said International Institutional investors, who have invested over 17 billion dollars in India so far this year, do seem to have a different view.
He said the Government will continue to do what is necessary to keep India on a stable, sustainable, and strengthening growth path.
