The credit outlook of India has been lowered to Negative by the Standard & Poors yesterday. It was not done on any fresh issues. There were problems for India to carry forward economic reforms despite the fact that India’s Prime Minister is one of the outstanding economists in the world and he knows better than anyone else that reform measures have to be taken up urgently.
Ever since the failure to allow foreign investment in retail sector the investors and rating agencies were watching India as to whether India stages a come-back in the overdue reforms program. It is not easy for the Prime Minister to make it when disparate political parties think differently on his proposals. In fact the P M is the most impatient person to reach on reforms regime as quickly as possible.
Another rating agency Moody’s has not cut the rating yet. However they pointed out their concern on the state of economy.The Moody’s did not cut rating is of little solace as investors would choose the worst rating to form base of their strategy.
It is a wake up call for India.
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