New government to have good political platform to tackle structural issues: Standard & Poor's

NEW DELHI: Standard & Poor's said the new Indian government’s fiscal and economic reforms over the next two to three months will have "significant implications", indicating that the ratings firm could upgrade its views on the country. S&P has a “negative” outlook on India’s barely investment-grade, BBB-minus, rating. Other two global ratings firms, Fitch and Moody’s, also have the lowest investment-grade rating, but with a “stable” outlook.

"In our view, NDA's strong showing indicates that it will have a reasonably good political platform to tackle structural issues,” S&P said in a statement issued from Singapore on Friday, referring to the election performance of the BJP-led National Democratic Alliance. "What the next government says and does in the coming months is crucial to boosting confidence in the policy settings and the economy,” credit analyst Takahira Ogawa said in the statement, after the election results became clear. "If confidence rises, investment and consumption in India could strengthen, after being held back by the uncertainty surrounding the election,” he said.

S&P blamed indecision for the nation’s slow growth. "Investments, particularly in infrastructure and the mineral resources sector, face slow approval processes at central and state government levels. This has reduced economic growth potential," it said, urging for fiscal prudence from the new government.