Amid weak economic growth of India, Economic Affairs Secretary Atanu Chakraborty stated that global rating agency, Standards and Poor’s (S&P) has reaffirmed sovereign rating of the country with stable outlook. It has reaffirmed sovereign rating of India at BBB- with stable outlook. The agency has stated that India’s economy continues to achieve impressive long-term growth rates despite a recent deceleration.
‘BBB’ signifies adequate capacity on an entity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to weaken its capacity to meet financial commitments. The rating action comes at a time when the government is facing flak from opposition parties for not doing enough to check the slide in economic growth, which hit six year lower low of 4.5% in the second quarter of the current fiscal.
S&P also expects the Indian economy to continue to out-perform its peers and that the growth will remain strong over the next two years. Besides, the government has been taking slew of measures, including sharp reduction corporate tax to boost economy. Moreover, the Reserve Bank has been extending support to government’s effort by repeatedly cutting key policy rate.