Mr Montek Singh Ahuluwalia, Deputy Chairman of the Planning Commission, joined other senior government figures in dismissing the significance of the S&P downgrade of India's long term credit rating to “negative” from “positive.”
While there was a purpose to rating agencies “history will tell how well their rating experience is,” said Mr Ahluwalia, speaking on the sidelines of a clean energy ministerial conference in London.
He said that following their failure to spot the financial crisis, ratings agencies had their hand on the “trigger.” “They are quite happy to signal weak economic macro conditions but we shouldn't mind that,' he said. “Investors are smart. They know there are different sources of signals and they weigh everything.”
“Every major crisis has been missed by the rating agencies and in the aftermath of every crisis they have been very quick to downgrade,” he said.
He added that the government was aware that there were actions it would need to take, and once those were undertaken S&P would likely change their grading again.