Giving a shot in arm to the government, the global rating agency Standard & Poor’s (S&P) has sharply revised India's growth forecast for the next several years to reflect a recent change in how gross domestic product is calculated by the government. S&P revised upwards GDP growth forecast to 7.9% for 2015-16 and 8.2% in the year after, crediting the move to rising investment and fall in oil prices. The agency also raised its growth forecast for 2016-17 to 8.2 percent from 6.6 percent previously.
S&P which currently rates India at “BBB-“ with a “stable” outlook had recently said that India must boost growth, cut its fiscal deficit and fulfill promises of financial and fiscal reforms to justify an upgrade in a credit rating, has now said that the Indian economy should be a 'bright spot' in Asia.
Regarding Asia-Pacific, the agency said growth in the region will be slightly lower, but India's “star is rising.” It also lowered growth forecasts for a slew of Asian countries, including China and Japan and said that weaker growth in China and Japan may be weighing on the overall sentiment.
S&P’s earlier projection of 6.2 per cent in 2015-16 and 6.6 per cent in 2016-17 of Indian economy were based on the old definition of gross domestic product (GDP) and the base year. The revisions come after India changed the way to measure the economy. Though, S&P has not specified that it had revised its estimates on the basis of the revisions in GDP computation.
