Global ratings agency Standard & Poor's on Thursday pegged India's FY'14 GDP growth at 6.4 per cent, one of the most optimistic estimates among analysts, and said it may upwardly revise outlook on the sovereign rating if the Government continues to focus on policy initiatives.
“We may revise the outlook to stable if the Government implements initiatives to reduce structural fiscal deficits, improves investment climate and increase growth prospects,” S&P, which last April put India's sovereign rating outlook to negative (BBB- which is close to junk status), it said in a note.
The agency, which had followed up on the outlook revision with a series of commentary threatening a downgrade of the sovereign rating to junk, specifically suggested an efficient use of the fuel, fertiliser and agricultural subsidies to bring down the fiscal deficit or an early implementation of the goods and services tax (GST).
It, however, said that factors like five state polls in the second half of 2013, followed by general elections next year.