India criticises S&P over remarks on fiscal deficit

Earlier in the day, S&P had said India is the "biggest laggard" in keeping its fiscal deficit under control.

India on Tuesday criticised credit rating agency Standard and Poor's for its observation that fiscal inflexibility was hurting the country's growth and infrastructure spending and that fiscal deficits have to be brought down to more sustainable levels.

HT Image

"May be Standard & Poor's are not looking at the figures. May be (they are) not listening to what I have been saying (on fiscal deficits)," Indian Finance Minister P Chidambaram said, adding, "We are committed to reducing fiscal deficit to 3.8 per cent of GDP and revenue deficit to 2.1 per cent of GDP this year."

"I have repeatedly said we will achieve the target. I think Standard & Poor's should turn its attention to some other countries," he said.

Earlier in the day, S&P had said India is the "biggest laggard" in keeping its fiscal deficit under control.

"It's easy to zero in on the biggest laggard, which unfortunately is India, which this year and next will clock up a general government deficit of 7 per cent or more," David Beers, MD and head of sovereign and international ratings at S&P told Bloomberg in an interview on Tuesday.

"The government is coming round to the view that fiscal retrenchment should be a priority and help boost economic growth," he said.

The combined deficit of India's central and provincial governments has averaged 10 per cent of gross domestic product in the past decade.

India's fiscal deficit in the first four months of 2006-07 has already crossed 58 per cent of its target for the whole year.