S&P will look at ongoing reforms before taking rating action: Finance Ministry

TOKYO: Global rating agency Standard and Poor's will look at economic reforms being undertaken by the government before taking any rating action, said top Finance Ministry official.

"Reform is a continuous process. We are moving ahead with several reforms ... you have heard about reforms regarding urea price recently. Reforms are on way and many more will be coming. And I am confident, Standard & Poor's will look at them and then make an assessment", said Arvind Mayaram, Secretary, Department of Economic Affairs in an interview to CNBC TV18.

He said this in response to a question on the recent threat of S&P to cut India's credit rating in 24 months to junk grade if it failed to carry out requisite economic reforms. Mayaram is here to participate in the IMF-World Bank annual meetings.

In the past few weeks, the government has taken a slew of reform measures, including opening the multi-brand retail chain to foreign investment up to 51 per cent and hiking FDI investment limit in insurance and pension to 49 per cent. It also liberalised FDI norms for aviation and broadcasting sectors.

The rating agency in its report on October 10 had said that there was one-in-three likelihood of rating downgrade for India if "the country's economic growth prospects dim, its external position deteriorates, its potential climate worsens, or fiscal reforms slow".

Finance Minister P Chidambaram had yesterday said, "I don't think there is a serious threat of a downgrade but we take the talk of a downgrade seriously. We will engage with rating agency and convince them that India does not deserve a downgrade."