Cannot ignore Fitch's outlook revision for India: Bimal Jalan

NEW DELHI: Stating that the government cannot ignore the outlook revision to 'negative' for the Indian economy, Bimal Jalan, Former Governor of the RBI said that there was a need to revive investment cycle. Jalan told ET Now that the fiscal and monetary authorities need to work together to bolster investment.

"Policy measures are required to boost growth," Jalan said. Admitting that even though different agencies have different view, Jalam said that in India's case all three major rating agencies of the world were 'looking down' on the Indian economy. The outlook of all these agencies will affect the sentiment of potential investors in India, Jalan said.

Jalan was also of the opinion that all rating agencies and market players are likely to revise their targets of GDP growth rate for the fiscal year.

In a fresh blow to India, Fitch ratings revised its outlook for the Indian economy to 'negative' from 'stable'. The rating agency has affirmed the economy's long-term foreign- and local-currency issuer default ratings (IDRs) at 'BBB-'.

According to Fitch Ratings, the revision reflects heightened risks that India's medium- to long-term growth potential will gradually deteriorate if further structural reforms are not hastened, including measures to enhance the effectiveness of the government and create a more positive operational environment for business and private investments.