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Our Bureau

Mumbai , May 5

The recent outlook revision - to positive - reflects India's improved prospects of a stabilising debt burden based on greater efforts across all levels of Government to consolidate fiscal positions, according to an S&P release.

It also said that the Central Government's recent budget and better State Government fiscal outcomes indicate that deficit reduction is back on track.

As per the report, this effort on fiscal consolidation should start to address the principal credit risks on India, which are generated by a weak fiscal profile, especially its high deficit and serious fiscal inflexibility.

This, together with continued strong growth, could see India's ratings rise.

However the S&P report also said that despite numerous setbacks in economic policies - including the ability to sell off State enterprises and liberalise the labour markets - the Government is achieving some success in reforming the economy. Incremental reforms are likely to allow India to grow at close to eight per cent.

It retains its growth forecasts for the regions economies, particularly India, at the levels set in February, with possible surprises.

More Stories on : Economy | Credit Rating

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