Sinha flays S&P for downgrading India

“There was nothing unusual that had occurred in the last few months that should have induced S&P to take such a step… I can only say that I do not agree with the step taken by S&P and there was absolutelyno need to make such a move," Sinha said at a meeting organised by the All India Business Council. He also met SEBI chairman D R Mehta and took stock of the capital market situation.

On the US-64, Sinha said the government was working on a package for revival of the capital market and the UTI flagship scheme, US-64. “We are planning to disinvest shares in public sector units through the Indian stock markets instead of going through the GDR route. This will not only revive the capital market but also help Indians to buy shares in good profit making PSUs,” he said.

"I am absolutely confident that the government will meet its disinvestment target. With the Concor disinvestment kicking off the other three would also be seen through," he said, adding, "The capital market will revive in the next few months and I am confident that the outlook will improve on the whole." On the fact that an FII was working in consonance with a bear cartel to bring down the capital market, Sinha said that he did not subscribe tosuch an idea.

Another package for boosting the economy can be expected in the next 10-15 days, said Sinha. "The ministry is closely watching the situation and adequate measures including that on introduction of buy-back of shares, would be taken at an appropriate time," he said.

Expressing his confidence over the revival of the economy, he said that all projects that got cleared by his ministry, would start with increased allocation of funds from the government mainly for infrastructure projects. Sinha declined to comment on the kind of solutions or proposal that the government was working on for the US-64 scheme of UTI and said that “whatever needs to be done will be done at the appropriate time.”

The finance minister said critics had accused India of going slow on economic reforms and not allowing full rupee convertibility. But these very `weaknesses’ had turned out be India strengths in the current scenario where countries like Japan and Brazil were being destroyed by flight of capital. Globaleconomic thinking is now coming round to the Indian model, he said.

Advocating rule-based capital flow, he said the monopoly of certain countries was one of the main reasons behind the unregulated flight of capital. Bodies like the International Monetary Fund and World Bank should have equal representation in place of the GDP-based weightage.

Regarding the United States economic sanctions following the nuke tests, Sinha said the sanctions have affected the US more than India. “Now the lawmakers in US are trying to lift the sanctions as soon as possible,” he said.