Despite global credit rating agency S&P's negative outlook of India's long-term credit rating, deputy chairman of the Planning Commission Montek Singh Ahluwalia has said that the country has a long-term growth potential of 8 to 9 percent.
Briefing reporters on the sidelines of a clean energy ministerial conference in London Thursday, Ahluwalia said that the country remained bullish.
My view of India is that it is bullish. India's long-term growth potential is 8 to 9%. In order to achieve this, we have to get our Macro-economic right, Ahluwalia was quoted as saying by PTI.
Standard & Poor's Wednesday downgraded India's credit outlook to negative from positive and warned of a downgrade if there was no improvement in the fiscal situation.
However, criticizing the rating parameters of credit rating agencies, he said, History will tell how well their rating experience is
Every major crisis has been missed by the rating agencies and in the aftermath of every crisis they have been very quick to downgrade, Ahluwalia said, according to a Business Line report.
Ahluwalia said that the Indian government was aware of the situation and necessary steps would be taken to improve it. He added that investors are smart and would see beyond the ratings to weigh in their options before investing. They know there are different sources of signals and they weigh everything, Business Line quoted him as saying.
Both the Indian government and the Reserve Bank of India discounted the S&P ratings and said that India had strong economy and markets.
Indian financial system is strong. That is our internal assessment. That our financial stability report always gives. Again, RBI's financial stability report will come in June. Then you can see what the position is, RBI deputy governor K C Chakrabarty was quoted as saying by PTI.
Finance Minister Pranab Mukherjee said that negative rating was a wake-up call and the government would work towards boosting the economic growth, according to a PTI report.