The Union Finance Minister Shri Pranab
Mukherjee said that the Government is fully seized of the current situation and
he is confident that there will be a turnaround in our growth prospects in the
coming months. The Finance Minister Shri Mukherjee was reacting to the S&P
recent report suggesting that India could be the first BRIC country to falter.
The Finance Minister Shri Mukherjee said that this is not based on a fresh
rating action. S&P had issued India's sovereign credit rating on April 25,
2012 reaffirming India's long-term sovereign credit rating at BBB(-). It had,
however, revised India's outlook to negative from stable.
The Union Finance Minister
Shri Pranab Mukherjee said that between April 2012 and now, there are no
significant events to indicate that the economy's vulnerability to shocks has
increased, though growth numbers for the fourth quarter 2011-12 have come below
the expectations. He said that S&P's recent report suggests that the main
factor that would determine India's investment grade credit rating is the
"government's reaction to potentially slower growth and greater
vulnerability to economic shocks."
The Union Finance Minister
Shri Pranab Mukherjee further said that there are several positives for the
Indian economy as we go forward. He said that RBI has reversed the interest
rate cycle by announcing a cut of 50 basis points at its last review of
monetary policy; mining sector growth has turned around, progress has been made
on fuel linkage for coal based power projects; there is a turnaround in the
quarterly investment growth rate, which had been negative in the third quarter
of 2011-12; a normal south west monsoon has been predicted for 2012-13 and
there has been a decline in international oil prices in recent weeks.
The Union Finance Minister Shri Pranab
Mukherjee said that the Foreign Institutional Investors (FII) have Reposed
faith in the Indian economy and had already poured in net USD 12 billion in the
first five months of the current calendar year (upto June 9, 2012) as against
an FII inflow of USD 8.3 billon in the full calendar year 2011. The Finance
Minister said that this is the highest net FII inflows in the last five years
for the corresponding period. Similarly, the fiscal year 2011-12 has witnessed
gross FDI flows of USD 46.8 billion, as against USD 34.8 billion in the fiscal
year 2010-11, the Minister added. Further, Shri Mukherjee said that there are
no major adverse results on corporate performance in the last quarter of
2011-12. All these factors should help in the recovery of domestic growth
momentum, the Finance Minister Shri Mukherjee concluded.
Source: Finance Ministry
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