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Ratings agencies must take India off the negative watch, according to Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission.
“Rating agencies had put us in a negative watch four months ago. I don’t think there is an ounce or iota of information that would suggest taking a negative view. Therefore, I am making the assumption that if the rating agencies are reading the signals right, they should remove the negative watch as I believe things are going to improve,” Ahluwalia said while addressing a banking summit organised here by YES Bank and Financial Times .
Last week, Standard and Poor’s had warned of a downgrade to India’s growth outlook.
He also said, “We are not making policy to second guess what the rating agencies will do.”
According to him, India’s current year growth projection by IMF at 4.9 per cent has come into focus but this “growth projection is demand driven”.
“But we are looking at supply capabilities as we are not export dependant country. Many measures to revive investor confidence will lead to a turnaround in the second half of this fiscal year,” Ahluwalia said.
He observed that the deceleration has been arrested due to two signals of an uptake which include “industrial production index appears to have gone up a little last month and the PMI (Price Manager’s Index) data seem to have been doing better according to many industrial analysts”.
“It would be reasonable to say that the slowdown has ended… I am not actually saying that resurgence has begun, but (with) what we have done (policy actions) the impact will be delayed,” Ahluwalia said.
“India will get back to nine per cent growth rate by the end of five years…we have the capacity,” he said.
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