. The visit assumes significance after another global rating agency Moody's downgraded Pakistan's domestic currency rating to default grade last week in view of the Kargil crisis.

Though S&P officials in New York have been categorical that the Kargil crisis will not lead to a downgrade, a full-scale war might lead the rating agency to review India's soverign rating. They are, however, expecting that second generation reforms will be unleashed once a new Government comes to power and that a blueprint of the second wave of reforms has already been prepapred.

The S&P team will be meeting bankers in Mumbai. Among the banks and FIs that the team is expected to meet are the State Bank of India, Bank of Baroda, Industrial Developement Bank of India and ICICI. It will also meet officials of the Reserve Bank of India.

Thevisit also assumes significance against the backdrop of the Central Statistical Organisation (CSO) revising the GDP growth rate to 6 per cent from 5.8 per cent for the current financial year. The upward growth is mainly on account of a record foodgrain production.

According to CSO's advanced estimates for the fourth quarter of 1998-99, the economy has shown an impressive 8.4 per cent growth during January-March compared with the same period last year.

The revision came after the agriculture ministry has estimated a record foodgrain production of 203 million tonnes for 1998-99. The earlier GDP growth rate was based on a foodgrain production of about 195 million tonnes. The growth estimates of manufacturing sector has been revised downwards to 5.2 per cent from 5.7 per cent.

Bankers have also noted first signs of revival in the economy. State Bank of India officials said credit grew by 4.5 per cent over March 31, 1999 for the first two months of the current financial year. This is despite the facttraditionally, in the first half of the financial year, the credit offtake is tardy. "In the past two years the credit offtake has not been remarkable. This year we are seeing early signs of revival," SBI managing director V Janakiraman said.

On the flip side, RBI has come out with a status report on the non-performing assets (NPAs) in the banking sector which shows that both gross NPAs and net NPAs have grown at 4.7 per cent in March 1998 over the previous corresponding period. The RBI has said fund diversion by promoters is the main reason for the bulging NPAs. This along with the fact that the fiscal deficit for 1998-99 has slipped to 7.03 per cent are ominious signs that the econmomy is yet to recover from the recession.