S&P Global Ratings Ranks India BBB-A/3, Government Calls Report ‘Very Satisfying’ - JPKee.com

New Delhi, Nov 24: Union Minister Piyush Goyal on Friday said that India’s sovereign rating by Standard & Poor’s (S&P) is “very satisfying”. “All in all, it is a very satisfying report. It shows that the economy is strong and is improving further. As per their projection, the pace of development will accelerate further in 2018-20,” Piyush Goyal was quoted as saying by ANI.

The Minister of Railways and Coal said that the Standard & Poor’s ratings show that the Narendra Modi government has been “successful in making transformational changes possible in India”. “They have also praised India for having strong democratic institutions including the press,” the minister said.

“They have reflected on the successes of Modi government in state elections and have actually predicted that following the series of successes in 2017 state elections, they expect many more successes in state elections in coming months. So, in some sense, they gauged the mood of India,” Goyal said, ANI reported.

Responding to the S&P ratings, Defence Minister Nirmala Sitharaman said that whether it’s World Bank rankings on ease of doing business, Moody’s rating or S&P, “it is clearly indicating that the Indian economy is strong, moving forward and has the potential for growth at a very high rate.”

The Finance Ministry also responded to the rating and said that the ratings “reflect country’s strong GDP growth, sound external profile and improving monetary credibility…These strengths r balanced against vulnerabilities stemming from country’s low per capita income & relatively high general gov debt stock, net of liquid assets.”

S&P on Friday refused to upgrade India’s sovereign ratings, a week after Moody’s did an upgrade. “The stable outlook reflects our view that, over the next two years, growth will remain strong, India will maintain its sound external accounts position, and fiscal deficits will remain broadly in line with our forecasts,” the global agency said.

Cautioning about the ratings, S&P said that there could be a downward rating if the GDP growth goes down, a significant rise in net general government deficits or political will to maintain India’s reform agenda significantly is lost.

“Ratings are constrained by India’s low wealth levels, measured by GDP per capita, which we estimate at close to $2,000 in 2017, the lowest of all investment-grade sovereigns that we rate. That said, India’s GDP growth rate is among the fastest of all investment-grade sovereigns, and we expect real GDP to average 7.6 per cent over 2017-2020 (6.5 per cent in per capita terms),” the S&P said.

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Author - Vikash Kumar