Commenting on global rating agency S&P’s decision to keep India’s rating unchanged, Economic Affairs Secretary Subhash Chandra Garg has said that the government is not disappointed with the S&P’s ratings. He said the rating agency has spoken favourably and also estimates that India would grow at 7.6 per cent plus in times to come. Garg further said the rating agency probably gave larger weight to fiscal side and 'that is why they played a little cautious'. However, he expressed optimism with government’s various reforms like fiscal consolidation drive and note ban and said that India’s second quarter (Q2) growth will be far better than the first quarter (Q1) of the current financial year.
Garg added that the economy will grow at a faster pace in the second quarter, noting that the decline path is bottomed out by reversing in growth and economy’s turnaround is very clear. He said 'We are not disappointed but our expectation would be that S&P also takes into account what the government has done' which are favourable for the economy. He also pointed that S&P’s assessment about state debt does not appear to be 'very sound' as states are constrained constitutionally and otherwise not to exceed to the prescribed borrowing limits.
While talking about S&P's status quo, Economic Affairs Secretary said that though the ratings agency did not upgrade India’s rating, but the rating agency has kept similar views like Moody’s, on the country’s structural reforms, growth story and institutional reforms. Moody’s recently had upgraded India’s sovereign rating to Baa2 - the highest since 1988.