Downfrade thread from S&P

[sob]

Despite tall claims during the rung up to the budget and post budget, things have not moved sufficiently to impress the International Rating agencies. The Union Budget was described by many as aimed more towards international ratings agencies, but the latest statement from S&P warning that India's sovereign risked dropping to Junk status, unless concrete steps were not taken soon.

In blow for India, S&P affirms negative outlook, reforms key - Firstpost

Standard & Poor's reiterated its negative outlook on India's credit rating, which is one notch above "junk", warning of the need to follow through on reforms and dealing a blow to a government that had recently pitched for an upgrade.
The rating agency said the main drag on India's rating is a high fiscal deficit and heavy government borrowing, although it also said India's position had improved over the past year.

"We have indicated compared to one year ago, there (is) some easing of the pressure towards the downgrade of the rating," S&P credit analyst Takahira Ogawa said on a conference call on Friday.

"But nonetheless there is still more than one-third of chance for downgrade unless we see significant improvement of the factors that we mentioned," he said.

S&P and its rival Fitch had cut their outlook on India to negative last year, warning the country of a possible rating downgrade to "junk" on worsening public finances, a slowing economy and persistent political gridlock in New Delhi.

With the election dates nearing very fast, the challenge for the FM will be to rein in populist policies, which are focues more on electoral arithmetic rather than economic sense.