S038;P threatens negative rating for India?

At the same time,Samp;P said,India is battling with high inflation,a weak government fiscal position,and slower economic growth on domestic front,while European sovereign debt problems could add to the pressures for the country.

8220;Like many countries,India is facing some challenges on a few fronts,and the balance of risk factors for the sovereign credit rating may be shifting slightly toward the negative,8221; Samp;P Ratings Services said today in a report.

8220;Standard amp; Poor8217;s doesn8217;t expect to downgrade or revise the outlook on the long-term rating in the near future. However,the negative factors,combined with the government8217;s weak policy formulation and implementation,may lead us to a tipping point,8221; Samp;P credit analyst Takahira Ogawa said.

8220;India has been grappling with a political gridlock and the government8217;s ability to implement measures to improve economic growth and fiscal prudence will be vital to boosting confidence,8221; Ogawa said.

As per the report titled 8220;Several Factors Could Weigh On India8217;s Current Stable Sovereign Rating In 20128221;,high inflation,a weak government fiscal position,and slower economic growth have hurt investor confidence in the rupee,triggered a capital outflow,and weighed on the stable sovereign outlook on India in 2012.

8220;Our stable outlook on the 8216;BBB-8216; long-term rating on India currently reflects our expectation of strong economic growth in the medium term and gradually improving fiscal performances,8221; Ogawa said.

He further noted that Samp;P has 8220;factored in inflation and political uncertainty,which may lead to higher government subsidies and stalled reform efforts.8221;

At the recently held World Economic Forum WEF Annual Meeting in Davos,Samp;P President Douglas Peterson had said they have an investment grade rating with a stable outlook on India and the country is more likely to improve further on this.

Brushing aside the concerns of slow reforms and the perceived notion of 8216;policy-paralysis8217;,Douglas had said,8221;In a democracy,the policies are made after a prolonged dialogue and that is indeed a healthy practise.8221;

Apparently,impressed with the positive discussions about India,Peterson went on to say that it was quite a refreshing change that the talks have moved away from the European crisis to India at Davos.