S&P's analysis not objective: Ashwani Kumar

Says IMF report puts India's growth at 7 percent this year

PTI | June 13, 2012



Blasting Standard and Poor's (S&P) for threatening to downgrade India's credit rating to below-investment grade, Minister of State for Planning Ashwani Kumar has said the global rating agency is not objective in its analysis and not fair to the country.

Given India's strong economic fundamentals, it "raises serious doubts on the objectivity" of S&P ratings, said Kumar, who is visiting the US as part of the Indian delegation for the US-India Strategic Dialogue.

"I personally think that an S&P rating is not being fair to India," Kumar said.

"I am appalled by the findings of Standard and Poor's and am certainly disappointed that S&P has chosen to club India with some of the countries with which there can be no reasonable comparisons," he said.

India is a USD 1 trillion economy, widely expected by independent experts to have the potential to become the third largest economy surpassing Japan by 2030, he said.

Ashwani said India has grown in the last several years at around 8 per cent and even in difficult circumstances, as per the IMF report it is likely to grow at 7 per cent this year.

On Monday, S&P cited economic slowdown and political roadblocks to policy-making to warn that India could be the first BRIC (Brazil, Russia, India, China) nation to lose investment-grade rating.

Kumar cited macro-economic fundamentals -- high domestic savings rates, high investment rates, demographic dividends and a burgeoning middle class with high purchasing power -- as positives that India has, saying that investors would not find S&P assessment reasonable.

"...with various flagship programmes of the government, empowering poorest of the poor, economically and educationally and with our commitment to skill up 500 million people by 2020 there is no way that investors would find the S&P projected ratings as reasonable," he added.

Kumar said the government has already stated that S&P has not disclosed fully the basis of its assessment.

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