S&P negative on India

A hassled government has just come under more pressure. Along with bad press, angry corporates and disillusioned foreign investors, it has to now deal with a ‘negative outlook’ tossed by the world’s largest credit rating agency, Standard & Poor's (S&P). The saving grace is that an hour before the S&P announcement, rival rating agency Moody’s said the Indian economy is “growing solidly, but below potential”. 
The divergence of views between the two agencies is a reminder of the US downgrade last August when Moody’s had countered Standard & Poor’s to say America was still a triple-A economy. On Tuesday morning, S&P, while retaining India’s ‘investment grade’ rating, revised its outlook from ‘stable’ to ‘negative’ due to worsening fiscal numbers. It’s a veiled threat that the sovereign rating may be downgraded from BBB-, which is the lowest-rung investment grade, to speculative grade if New Delhi fails to pull up its socks. But, the finely-timed Moody’s statement helped allay fears that a downgrade was imminent.