Notwithstanding global credit rating agency S&P’s lowering India’s outlook to ‘negative’, the country remains bullish and its long-term economic growth potential is 8-9 per cent, Deputy Chairman of Planning Commission Montek Singh Ahluwalia has said.
“My view of India is that it is bullish. India’s long-term growth potential is 8 to 9 per cent. In order to achieve this, we have to get our Macro-economic right,” said Mr. Ahluwalia, briefing media at the third Clean Energy Ministerial Meeting which concluded on Thursday evening.
He added, “India achieved a growth rate of 6.9 per cent last year. The question is whether India’s growth in 2012-13 will go up or not. Growth is taking place in Asia -- China and India.”
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Standard & Poor’s on Wednesday downgraded India’s credit outlook to ‘negative’ and warned of a downgrade if there is no improvement in the fiscal situation and political climate.
Finance Minister Pranab Mukherjee termed S&P’s move as a “wake-up call” and said the government would work towards achieving higher economic growth.
“The Finance Minister has already commented on the Standard and Poor’s decision to change the outlook on India from stable to negative. I have nothing to add to it,” Mr. Ahluwalia said.
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Yesterday, the Reserve Bank of India said the country’s financial system is strong and sometimes these ratings are discounted by markets.
RBI Deputy Governor K.C. Chakrabarty has said, “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.”