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Standard & Poor's welcomes reform measures by government

18 Sep 2012 Evaluate

With a string of bold initiatives by the UPA II government to revive growth of the slowing economy, the rating agency Standard & Poor's (S&P) expressed hopes that implementation of the measures proposed would provide a medium-to-long term positive impact for the macroeconomic conditions.

In an attempt to reduce the fiscal burden of the country, the government had hiked diesel prices by a steep 12% or Rs 5 per litre and placed a cap on subsided cooking gas. The government also announced long awaited liberalization of foreign holding caps in civil aviation, multi-brand retail, non-news broadcast media and power exchanges. It also announced a plan to divest its stake in four companies.

S&P’s Director for sovereign ratings Takahira Ogawa pointed out that centre’s recent actions would boost the development of the nation, though expressed concerns that it is ambiguous whether these measures can be implemented or not.

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