After S&P Rating Upgrade, BJP Attacks Rahul Gandhi Over "Dead Economy" Remark

The comment of Congress's Rahul Gandhi that India is a "dead economy" had backfired after S&P Global Ratings raised its long-term unsolicited sovereign credit ratings on India to 'BBB' from 'BBB-', and its short-term ratings to 'A-2' from 'A-3'. The upgrade reflects India's "buoyant economic growth, against the backdrop of an enhanced monetary policy environment that anchors inflationary expectations," S&P said. It brought massive jeers from the BJP, which questioned why Rahul Gandhi "roots for failure".

Last month, after announcing 25 per cent tariffs on imports from India, US President Donald Trump said he did not care about New Delhi's dealings with Moscow and that the two "can take their dead economies down together".

Shortly after, Mr Gandhi told reporters at Parliament that he agreed with the US President. "He is right, everybody knows this except the Prime Minister and the Finance Minister. I am glad that President Trump has stated a fact."

It had unleashed a political storm with not just the BJP attacking him, even Shashi Tharoor and Rajiv Shukla giving dissenting views. 

"India remains among the best performing economies in the world. It staged a remarkable comeback from the pandemic with real GDP growth over fiscal 2022 (year-end March 31) to fiscal 2024 averaging 8.8%, the highest in Asia-Pacific," S&P said today. 

"We expect these growth dynamics to continue in the medium term, with GDP increasing 6.8% annually over the next three years. This has a moderating effect on the ratio of government debt to GDP despite still-wide fiscal deficits," it added.

The recent performance of the Indian economy, S&P said, highlights its "historical resilience".

"We also predicate our projections for solid growth (notwithstanding external headwinds) on the country's constructive structural trends. These trends include healthy demographics and competitive unit labor costs. In addition, we believe India's corporate and financial sectors have stronger balance sheets than before the pandemic," it added.