New Delhi: BJP on Tuesday termed the downgrade warning to India by ratings agency Standard and Poor`s as a "wake-up call" and charged the government`s "policy paralysis" was responsible for it while Congress dismissively said it was not a "gospel truth" about the state of the economy.
BJP said the UPA government "is still in denial mode about the economic crisis" despite the warning from the global ratings agency and claimed this was a result of the "governance deficit and differences within the government".
"Standard and Poor`s downgrade warning is a wakeup call for India... Instead of amending and carrying out mid-course correction, the UPA government is as usual in denial mode. The denial won`t work as international investors accord much credence to the ratings by the ratings agency," BJP spokesperson Prakash Javadekar said.
The ratings agency had warned India may lose its "investment grade" and may become the first "fallen angel" among BRICS nations.
"BJP has consistently pointed out that governance deficit in UPA government is causing an irreparable loss to the country. There are differences within Congress, within the cabinet, between the coalition partners and between 10, Janpath (Congress President`s residence) and 7, RCR (PM`s residence)," Javadekar said.
He charged this has resulted in a "complete policy paralysis evident in every field of decision-making".
However, Congress dismissed the S&P report, saying it was "not gospel truth".
"Standard and Poor`s report is only a ratings agency report and not the gospel truth nor a casting stone," party spokesperson Manish Tewari said.
The S & P report says there are roadblocks for reforms in
India on account of division of roles between party President Sonia Gandhi and `unelected` PM Manmohan Singh.
"The report betrays very poor appreciation of India`s democratic system and government`s functioning. The same report points out higher growth for the country in 2007. Even in that period, Sonia Gandhi was UPA Chairperson and Manmohan Singh was Prime Minister. If at all there was a disconnect, why was it not affecting the growth rate then?" Tewari said.
Standard and Poor`s, which had lowered India`s rating outlook to `negative` from `stable` in April, said Congress is divided on economic policies and there is substantial opposition within the party to any serious liberalisation of the economy.
Tewari, however, dismissed the criticism saying some people are in the habit of raising ghosts and slaying them.
"To extrapolate that there is a disconnect is completely erroneous and betrays complete lack of awareness about India`s political system and governance. If there was such a disconnect, why the country`s economy grew so fast earlier?" Tewari said.
BJP targeted the government on the issue and insisted such downgrades will adversely impact the already deteriorating Indian economy and make international borrowing costly for Indian companies.
Javadekar also posed some questions to the government: "can the Finance Minister deny that growth has come down to 5.3 per cent and Index of Industrial production has fallen from 5.3 per cent to 0.1 per cent on a year-on-year basis?"