New Delhi: India's Minister of State for Planning Ashwani Kumar has said that the government is "appalled" by global credit rating agency Standard & Poor's (S&P) recent warning that India may lose its investment-grade rating, saying that the country is expected to have an average annual growth rate of 8.5% between 2012-2017.
"People are entitled to ask what are you going to do about delayed decisions, what are you going to do about second generation reforms... But I am appalled by the suggestion of S&P that India is compared with junk status," Kumar told the Reuters.
Earlier Monday, in a report titled -- Will India Be the first BRIC Fallen Angel? -- S&P warned that India could become the first among BRIC nations to lose its investment-grade rating primarily on account of slowing economic growth and political logjam that has held back key fiscal policy reforms, less than two months after it had cut India's outlook to 'negative' citing similar reasons.
Other BRIC members are Brazil, Russia and China. They all enjoy rating status higher than that of India.
However, the government is aware that the country's Jan-Mar quarter gross domestic product (GDP) growth of 5.3%, the lowest in nine-years, is not comforting, Kumar said.
"To the extent our economic reforms are not taking place, we cannot blame on the foreign economic situation...(To) the extent that we have to resolve governance issues, we are not going to invoke the foreign economic situation. But it is a fact India is impacted by the European crisis," he said.
Finance Minister Pranab Mukherjee has also blamed the Euro zone debt crisis on several occasions for partly affecting India's economic growth. Mukherjee has also rejected S&P's warning.
But, various domestic projects like the $100 billion commercial rail freight corridor proposed to be constructed between the cities of New Delhi and Mumbai will help boost economic growth, he said.
Besides, falling crude prices will help ease pressure on the rupee, which breached the psychologically disturbing mark of 56 against the US dollar in May despite a string of administrative measure taken by the RBI recently and frequent interventions by the central bank in the currency market to arrest the currency's fall.
"We are confident in the view that the moderation of crude oil prices will soften the pressure on the Indian rupee and over time it should stabilize in the coming 3-5 months," Kumar said.