India should not get rattled by S&P rating; we have an inherent strength: Rajkumar Dhoot

NEW DELHI: The government should show some political courage to stop the negative sentiment spread by rating agencies like S&P and reverse the decline in confidence of investors, a delegation of the country’s leading businessmen told PM Manmohan Singh on Tuesday.

Assocham president Rajkumar Dhoot, in a memorandum to Singh, dismissed S&P’s assessment of the Indian economy and said there was nothing in the report which was revealing or new. It looks like the researchers have compiled newspaper clippings and put out a paper, which is quite damaging for an economy, he added. The industry body represented the businessmen in the meeting with PM.

Dhoot said these comments come from an agency, which had given AAA ratings to some of the junk financial products in the run-up to the global financial crisis of 2008-09. S&P and Moody’s had assigned one of the highest ratings to institutions like Lehman Brothers and AIG, which later found it difficult to meet their liabilities, resulting into a global financial crisis.

“Let India and other emerging countries not become whipping boys for these global agencies. They do more harm than good to us as they create a worldwide negative perception about our economy," Dhoot said. “Let us not get rattled by these rating outlooks and the threats. The Indian economy has an inherent strength and we never had any record of default in any of our international obligations.”

Some of the comments in the report about the political and government leadership are uncalled for, to say the least, he pointed out. Some of these comments are quite a drawing room talk, that too in a loose fit. S&P in its report had blamed the ruling Congress party and its leadership for not pushing the reforms. The Assocham delegation urged Singh to put the house in order in these challenging times and face the rough weather with courage.