Fitch's downgrade not worrisome : FM

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Finance Minister P Chidambaram on Friday downplayed the lowering of India's credit outlook by global rating agency Fitch, saying it is not a cause of worry as economic fundamentals are strong.

"One rating agency has revised the outlook from stable to negative. I do not think that should cause us too much worry. We must look at fundamentals, which I believe are still strong, but facing difficulties. I do not think we should worry about outlook," Finance Minister P Chidambaram said.

Fitch has earlier this week revised the local currency outlook of India to negative from stable because of fiscal pressures.

Distinguishing between a rating and outlook, Chidambaram said what Fitch has done is to take one step down on the outlook from stable to negative, but the rating remains the same for the country.

"What is outlook? Outlook is simply a view of the future. This is based on the context of the world economy and the Indian economy. Outlook can easily change in a month or two. If the objective conditions change, outlook can also change," he said.

Chidambaram further said when this government came into office, many of the rating agencies have a negative outlook, but they changed it to stable and one or two even to positive.

He, however, said change in ratings would have have an impact on interest rates.

On fiscal concerns raised by Fitch, Chidambaram said fiscal deficit targets given in the Budget would be met this fiscal.

"I have said every year. Nobody believed me during the year, but at the end of the year we have not only met (Budget deficit) targets but bettered them also. Even for 2007-08, the actuals are better than the revised estimates. This year also the Budget deficit would be met," he said.

Elaborating further, the Finance Minister said Fitch and others are talking about off-Budget numbers. "Now, why are these numbers off Budget, these numbers are off-Budget because we do not have the money to provide for them in the Budget," he said.