Dismissing fears of a rating downgrade, finance minister P Chidambaram on Thursday said the government will take a host of reform initiatives over the next two years to spur growth.
“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 agencies and convince them that India does not deserve a downgrade,” Chidambaram said at a press conference on the sidelines of the IMF-World Bank annual meetings in Tokyo.Chidambaram was replying to a question on the possibility of a downgrade of India’s credit rating to junk grade by global agency Standard and Poor’s (S&P) in 24 months if additional reforms measures are not implemented.
“(S&P) said there is a one-in-three chance over 24 months. I think 24 months is a long time. You will see a lot of reforms, a lot of change and a lot of strengthening of the Indian economy,” he said, adding in terms of growth and potential for growth, India was way above most countries.
S&P in its report on Wednesday said there was a likelihood of a rating downgrade if India’s economic growth prospects dim, potential investment climate worsens or fiscal reforms slow down.
{{/usCountry}}S&P in its report on Wednesday said there was a likelihood of a rating downgrade if India’s economic growth prospects dim, potential investment climate worsens or fiscal reforms slow down.
{{/usCountry}}He said the easy money policy being followed by the developed world would not only bring more money into emerging nations, but also boost commodity prices.