原文标题：S&P cuts India’s outlook from stable to negative
Global agency Standard and Poor’s on Wednesday lowered India’s rating outlook to negative and warned of a downgrade in two years if there is no improvement in the fiscal situation and the political climate continues to worsen.
The lowering of outlook from stable (BBB+) to negative (BBB-) is expected to make external commercial borrowings expensive for Indian Inc.
It may also have implications for the capital market.
“The outlook revision reflects our view of at least a one-in-three likelihood of a downgrade if the external position continues to deteriorate, growth prospects diminish or progress on fiscal reforms remains slow in a weakened political setting” said S & P’s credit analyst Takahira Ogawa in a statement.
Terming S&Poor’s decision to lower India’s credit rating outlook to negative as a ‘timely warning’, Finance Minister Pranab Mukherjee, however, said there is no need to panic as the government is committed to economic reforms.
“I am concerned but I don’t feel panicky because I am confident that our economy will grow at 7 per cent, around 7 per cent if not plus.
“We will be able to control fiscal deficit and it will be around 5.1 per cent”, he told reporters.
BBB- is the lowest investment grade rating.
Commenting on the rating action, Jagannadham Thunuguntla, strategist and head of research at SMC Global Securities, said, “Indian (new) sovereign rating is just one step away from junk bond status. . . Somehow I feel the dream of India growth story is coming to an end”.
The negative outlook, the rating agency further said, signals likelihood of the downgrade of India’s sovereign within the next 24 months.
The finance minister said that government will take note of the S&P’s decision to lower India’s rating outlook to BBB- (the lowest investment grade rating) and work for achieving higher economic growth.
“So economic reforms will be on track. The reform process and necessary administrative decisions required to ensure that fiscal deficit is retained at projected level (will be taken).
“We should continue to work for higher GDP. . . We will take note. It is a timely warning”, the minister said.
According to S&P’s, a downgrade is likely if the country’s economic growth prospects is dim, its external position deteriorates, its political climate worsens, or fiscal reforms slow.
The lowering of rating outlook comes despite Finance Ministry pitching for an upgrade at the recent round of meetings between the officials and representatives of the S&P.
S&P said India’s real gross domestic product per capita growth will likely remain moderately strong at 5.3 per cent in 2012-13, compared with about 6 per cent on average over the prior five years.
“India’s favourable demography and the increasing middle-class population will undergird its medium-term growth prospects, which in turn will support the sovereign ratings,” Ogawa said.
India’s favourable long-term growth prospects and high level of foreign exchange reserves support the ratings, the agency said.
On the other hand, India’s large fiscal deficits and debt, as well as its lower middle-income economy, constrain the ratings, it added.
“High fiscal deficits and a heavy debt burden remain the most significant constraints on the sovereign ratings on India. We expect only modest progress in fiscal and public sector reforms, given the political cycle — with the next elections to be held by May 2014–and the current political gridlock,” S&P said.
Such reforms include reducing fuel and fertiliser subsidies, introducing goods and services tax, and easing of restrictions on foreign ownership of various sectors such as banking, insurance, and retail sectors, it said.
On the other hand, S&P said the ratings ‘could stabilise again if the government implements initiatives to reduce structural fiscal deficits and to improve its investment climate’.
Fiscal measures could include an increase in domestic prices and a more efficient use of fuel and fertiliser subsidies, or an early implementation of the GST.
Reacting to the rating action, a senior Finance Ministry official said India’s growth rate is intact and robust and it is not going to have any major impact on the country.
“We are not overtly concerned about revision. Other nations make India look good,” the official added.
S & P is correct
by Sandy W (View MyPage) on Apr 26, 2012 07:19 PM
S & P is absolutely correct.
India actual growth rate decline from 9% to 5.5%.
India government & real estate developers are in day dream state.
S&P credit rating a joke.
by Trikunsh Sharma (View MyPage) on Apr 25, 2012 07:59 PM
Dear Fellow Indians,
I think we should pay no heed to the credit ratings by S&P. These are all puppets of U.S and Western, so called developed contries. If we were to fall in line with what U.S and other developed nations want of us these credit ratings would miraculously improve all of a sudden with new statistics thrown in. We would become part of another stone or Bric nations with advisery to the world to invest.
Another reason for the credit rating is to curb money flow to India. Money has been steadily flowing into India due to the progress made over the years. They were all happy when times were good. However they now want to stop money flow to India as their own house is struggling and hence the credit rating. I think if we look at America and their debt everyone knows it is junk but look at the credit rating of America. 2G Scam,CWG Scam, Adarsh Scam etc are nothing compared to this scam by the developed nations. It would be best if our politicians wise up and do such scams that allows every Indian to lead a better life. What say ya?
by SUNIL SHETH (View MyPage) on Apr 25, 2012 07:49 PM
S&P has done more damage to the corporate world worldwide than performing its own duty honestly. In US itself, the situation just went opposite than what it predicted. And by the way why should we rely on S&P for our own strength than depending on any outsider’s opinion when our counttry has hundreds of renowned economists & experts in the area??
There is something more than meets the eye !! Possibilities cannot be ignored that few large FIIs and punters work hand in glove to bring the market to a fictitious level and then corner the scrips OR play sell and cover game by spreading such rating news. No doubt India cannot remain aloof from world economy, BUT if India is rated BBB- than what could be the rating for Spain and other EU nations, UK & US? Present scenarion predicts very gloom picture for all of these nations.
Mission not yet achieved
by My Opinion (View MyPage) on Apr 25, 2012 07:33 PM
Con-grass is working hard towards making ZZZ (worst than lowest) and not BBB(lowest).
by NIRMAL BALIA (View MyPage) on Apr 25, 2012 07:11 PM | Hide replies
this is what BHARAT DESERVES because of CONGRESS POLICIES
by Varadarajan Ravindran (View MyPage) on Apr 26, 2012 04:10 AM
You do not seem to know the fundamentals of economics. US companies do not have any money and are mostly bankrupt. Indian companies know the spelling of the word “growth”.
No need to worry about S&P
by Amithkumar (View MyPage) on Apr 25, 2012 04:34 PM
No need to worry about this ratings. These S&P have not succeed in giving ratings till now. People may know what rating they given to USA.
by kapil (View MyPage) on Apr 25, 2012 03:44 PM | Hide replies
this upa gov. cheated crores of people in the name of IPO, those who invested now in jail and some suicides. Ministers enjoying without any worry.
dear S and P
by kapil (View MyPage) on Apr 25, 2012 03:42 PM
you have done it rightly. In fact it should be – 000 , this country running by some old men who cannot walk, run and talk. G0d bless you all S and P team.
Sub prime loans
by RAVIKUMAR VADIVELU (View MyPage) on Apr 25, 2012 03:24 PM | Hide replies
This same S&P rated US sub prime loans at AAA.
Need not bother these guys.
All these ratings affect only
by Incredible India (View MyPage) on Apr 25, 2012 03:10 PM | Hide replies
the riches of the country;
The poor who wants to get daily bread for evening has less to do with this;
Same story is also about USA; these things are only for Wall-street and others are least affected; And that is why we see that more uprising revolution of poor or middle class in USA;
Re: All these ratings affect only
by sunil (View MyPage) on Apr 25, 2012 03:52 PM
poor rating means less investment.. less projects… less business .. and less jobs… less employment.. less oppertunity for poor… less wages… HOW COME POOR ARE NOT AFFECTED???
by Om Garg (View MyPage) on Apr 25, 2012 02:28 PM | Hide replies
Unless and untill Sonia is not removed from her stellar position Indias rating can not improve She does not know any thing about the country finance or culture yet all decisions are taken by her in sole consultation with Rahul and Priyanka Even people like MMS and Pranab are clue less and not consulted on important matters
by Altu Faltu (View MyPage) on Apr 25, 2012 02:11 PM | Hide replies
It is all bullshit. We are great ! We are great ! AND We are great —– EVEN OBAMA SAYS SO.
by living dead (View MyPage) on Apr 25, 2012 02:19 PM
bull *** or not, because of this rating our external borrowings are going to become costlier. It will impact on our growth, pulling it down even more !!
by Devdutt Sen (View MyPage) on Apr 25, 2012 02:27 PM
Obama and Osama are the same for India, don’t be elated
FACT OF THE DAY
by Chalta Hai (View MyPage) on Apr 25, 2012 01:49 PM | Hide replies
forget India, even
IS GROWING FASTER
Re: FACT OF THE DAY
by Dhiman Mohajan (View MyPage) on Apr 25, 2012 02:28 PM
Ya their suicide bomber making factories are working day and night .
by surya menon (View MyPage) on Apr 25, 2012 01:49 PM | Hide replies
India deserves it top be best 3rd grade country. It like regression back to the 3rd world era
Re: good rating
by Maihoon Don (View MyPage) on Apr 25, 2012 01:50 PM
Why are you staying in India then?
Re: Re: good rating
by Jaideep Chanda (View MyPage) on Apr 25, 2012 01:53 PM
India is a third world country…face it…the current situation of things have just upped the tempo..
Re: Re: Re: good rating
by Maihoon Don (View MyPage) on Apr 25, 2012 02:01 PM
Stop using India’s benefits if you think so. Stop going to malls, stop using telecom services, stop using any services that India has progressed in last several years.
by Santhosh Pallavour (View MyPage) on Apr 25, 2012 01:49 PM | Hide replies
jai sonia madam & manmohan singh
Re: jai ho
by Indian (View MyPage) on Apr 25, 2012 01:54 PM
No use blaming MMS as he does not have any power
Congress will destroy india
by Rajan S (View MyPage) on Apr 25, 2012 01:39 PM | Hide replies
As if nothing is enough, they are all set to de-control oil prices as well. Already a 100 rs note means nothing when we go to any shop these days, thanks to the manmohans and alhuwalias. What more they have in store to test the patience of indian people????
Re: Congress will destroy india
by ymum (View MyPage) on Apr 25, 2012 01:49 PM
problem is within indian politics.all parties are friends.They do for themself not for us.petrol prices are high only in india.In us 45 rupees, in pakistan 45 rupess approx, in srilanka same rate approx,they are getting commision so they dont negotiate.So finally we are getting charged.SO all products are getting costly because of this.scams are giving fuel.only polition are getting rich.ROBERT VADARA has earned within 10 years as much as ambanies which they earned in last 50 years