One day after the event, apex industry chambers played down the impact of the outlook downgrade and the threat of a possible ratings downgrade in the future by global credit ratings agency Fitch, dubbing it an “overreaction.”
“A growth of 6.5 per cent still is one of the fastest in the world. India is on a consolidation mode to strengthen its finances and structural reforms. A slew of initiatives taken at the highest level including tracking of investments of Rs 1,000 crore and above held up due to regulatory clearances, increased diesel prices are some of the steps which have set the tone for the economy,” said Mr D.S. Rawat, Secretary General, Assocham.
According to President, PHD Chamber, Mr Sandip Somany, “India’s growth remains one of the highest in the world, but a range of factors have weighed it down such as weak investment, high-inflation, governance concerns, increased global uncertainty, rising funding costs and costs of doing business. The recent outlook downgrade by S&P and Fitch rating agencies from stable to negative is unfortunate. Going forward, the ratings could stabilise again if the government implements initiatives to reduce structural fiscal deficits and to improve its investment climate.”
Assocham said that the country has the capacity to improve its finances and the Fitch assessment is no standard to assess the capability of this country.