S&P fails to take note of reforms undertaken in last six months: Rangarajan

Prime Minister's Economic Advisory Council chairman C Rangarajan today said Standard & Poor's has failed to take into account the reform measures that India has initiated in the last six months, while retaining the economy's ratings to lowest investment grade.

" The Finance Minister (P Chidambaram) has shown great determination to control the fiscal deficit which will certainly go down in the current fiscal. Even on the reform side, many things are being done such as the deregulation of diesel prices and liberalization of the FDI norms. The rating agency has not recognized these reform steps which are put to place,” Rangarajan told Business Standard.

He said there are change in the sentiments and the Indian economy is expected to grow well in the current financial year as compared to last year.

" Our forecast is that the GDP growth will remain somewhere near 6.4% and surely."

Rangarajan said S&P should revise the ratings upwards in the coming months as investment rate is still high.

"The potential for high growth is very much omnipresent in our economy and the reform measure which are hence announced would only lead to higher growth rate in the current year,” he said.