Unlike Moody's, S&P is known to be conservative, says Piyush Goyal

Minister says agency's outlook is positive, with much praise for Modi govt's policies, which are being recognised worldwide

Standard & Poor's today kept its outlook on India stable and lauded the Modi government's fiscal consolidation drive. The ratings agency retained its BBB- rating while taking a favourable view on reforms being undertaken.

Speaking to ANI, Union Minister Piyush Goyal, said, "It's an affirmation of the policies of the government being recognised worldwide. S&P has given an overall positive outlook with much praise for Modi govt's initiative". 

However on the issue of upgrade, he said, "Didn't expect any upgrade from S&P at this time. Moody's has done 2 upgrades so far and S&P is known to be conservative". 

Speaking to CNBC TV-18, Rajiv Kumar, Vice Chairman of Niti Aayog said, "Status quo would mean S&P not apprised of reforms over the past three years". 

On the issue of debt to GDP ratio, he says, "Don't see debt to GDP ratio to determine India's ability to service debt".

"There are major steps taken to de-bottleneck the infra sector. Not sure as to why S&P would see no upward pressure on ratings. Pessimistic outlook on fiscal situation going forwards is unwarranted," he added

Speaking to CNBC TV-18, DEA Secretary Subhash C Garg, addressed the concerns raised by S&P in terms of sizeable fiscal deficit and high govt debt burden. He said, "S&P has the same 2 concerns as Moody's". On the issue of reforms, he said, "S&P has raised comments as Moody's on reforms. S&P has said everything that Moody's said and they have affirmed India's growth story".

Speaking to CNBC, Former DEA secretary Shaktikanta Das said, "I dont find any recognition of the reforms undertaken in the last 2-3 years".

On fiscal challenge and the issue of revenue underperformance, he said, "there is nothing new in this argument. The cash to GDP ratio is gradually going up. It has gone done after 2008 financial crisis in the last 3-4 years. Post GST, demonetisation we expect the tax base to widen.

He also stated that, "S&P is missing the widening of tax base after GST, demonetisation. FRBM recommendation for cash to gdp is on the process. it is under consideration. About per capita income it is a long term issue, govt is on the process. You need to look at what kinda reforms we are moving". 

On concerns raised on banking recapitalisation, Shaktikanta Das, said, "the capability of the govt to recover debt is unquestionable.  India has never defaulted on loan payment. Going forward will have always have a challenge for the economy"

Speaking to ET Now, Ashima Goyal, member, PMEAC, said "India is a healthy mix of consumption and saving. The consumption shock after demonetisation is on the recovery, will turn around in the near future". 

On S&P's stand on our external trade position, she said, maybe they have been looking about the rise of oil prices impact but it is mostly because of shale production in the US. The current inflation of oil prices is a risk but these are not very high risk".

Speaking to ET Now, Shobana Kaminemi, CII President, on asked, "Are you disappointed that an upgrade has not come?". She said, "The commentatory is more important than what's actually happening on the ground. The Q2 results, consumer demand strength, company results and stock markets are more important. The industry will always be the last to come to the party. When we start adding more capacity we will know the full extent of eco reforms".

"An analysis of the foreign currency long term sovereign ratings given by S&P for a group of twenty countries for the period 2005-17 indicates that with India currently being in BBB- rating class there is only a 5% probability of rating upgrade. Hence a rating action was always difficult. Even if we assume that India is fortunate enough to find itself in 5%, it moves up to BBB. In BBB, however there is a 17% probability of moving to the BBB+ class. In BBB+, the chance of rating upgrade is minimal. Hence, India can at best hope to move into the BBB+ category, over the medium term. But once it crosses, A- there is a real chance of India getting into A+," said, Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.