S&P Team Meets Finance Ministry, Flags Concerns About Slow Reforms

Economic growth slowed by more than expected in the quarter to June, according to data released on Monday that is likely to worry Prime Minister Narendra Modi and prompt more urgent calls from his aides for interest rate cuts.
  Gross domestic product expanded an annual 7 per cent rate in the April-June quarter, government figures showed. That was slower than provisional growth of 7.5 per cent in the previous quarter.
  A team from ratings agency Standard and Poor's met with Finance Ministry officials today and expressed concern over the slow pace of reforms. Chief Economic Advisor (CEA) Arvind Subramanian pitched for a ratings upgrade citing strong macroeconomic indicators, low inflation, the government's commitment to implementing major tax reform the Goods and Services Tax (GST) bill. He also said that country's growth in the current fiscal is expected to improve to around 8 per cent.

India currently is rated by S&P as BBB-. This means the country has ability to pay back loans and meet its financial commitments. It's the lowest investment grade rating. Below this grade, rating is junk.

While India matched growth in China, the loss of momentum comes just as PM Modi's image as the country's economic saviour appears to be diminishing 15 months after his historic electoral triumph. Yesterday, the PM announced that the executive order making it easier for businesses to buy land is being allowed to lapse by the government after it failed to win support from opposition parties in a major blow to his economic reform agenda. Mr Modi swept to power last year on expectations that he would accelerate an economic transformation that began in the 1990s but is struggling to build support for reforms in parliament, where his party is in the minority in the Rajya Sabha or upper house.