Pranab Mukherjee has given statements in press saying that S&P report is not based on fresh rating action, and that there would be a turnaround in country’s growth prospects in coming months.
I believe him to be right. My analysis shows that India growth story is intact and the gloom and doom scenarios being painted is due to inability of analyst’s to interpret numbers correctly, and an undue focus on business cycles at the cost of long term trend.
As for S&P, as per my previous story, one has to be wary of their reports and ratings. In 2009 they had downgraded India sovereign rating just three months before the markets did an upward breakout and growth numbers turned around !
India’s growth story is no thanks to the current government, but is a tribute to a basic resilience and the underlying growth momentum of Indian economy itself.
India growth story is intact, not because of government action, but notwithstanding government inaction !