Dismissing fears of a rating downgrade, finance minister P Chidambaram today said the government will take a host of reform initiatives in the next two years to spur growth momentum.
“I don’t think there is a serious threat of a downgrade but we take the talk of a downgrade seriously. We will engage with rating agency and convince them that India does not deserve a downgrade,” the minister said at a press conference on the sidelines of the IMF-World Bank annual meetings here.
Chidambaram said this while replying to a question on the possibility of downgrade of India’s credit rating to junk grade by global agency Standard & Poor’s in 24 months if more reforms measures were not implemented.
“They (S&P) said there is one-in-three chance over 24 months. I think 24 months is a long time. You will see lot of reforms and lot of change, and lot of strengthening of the Indian economy,” he said, adding in terms of growth and potential for growth, India was way above most countries of the world. S&P in its report on Wednesday said that there was one-in-three likelihood of rating downgrade for India within 24 months if growth prospects dim, its external position deteriorates or fiscal reforms slow down.
FM’s remark on rating lifts mkts; Sensex up 174 pts
MUMBAI: The Sensex on Thursday rallied nearly 174 points on all-round buying after finance minister P Chidambaram allayed fears of a downgrade threat, and amid hopes of Infosys posting robust numbers to kickstart the earnings season on Friday.
The Nifty gained 55.9 points to close the day at 5,708. A day after markets fell on the threat of sovereign downgrade from S&P, it followed the Asian markets in early trading hours and were trading down as premier indices in Japan, China and Korea fell between 0.6 per cent and 0.9 per cent. Markets, however, recovered following the upward trend in the European markets. ENS