New Delhi: The timing of the outlook revision for India’s long-term sovereign credit rating by the global agency Standard & Poor’s could not have been worse. The finance ministry apprehends S&P move could make it difficult for sectors like aviation and housing to access cheaper overseas funds through the external commercial borrowing window announced in the Budget.
The cost of borrowing is expected to rise for these Indian companies as the downgrade coupled with negative sentiment on Indian economy might spoil their chances, the government feels.
Analyzing the impact of the S&P action, a senior finance ministry official requesting anonymity said it would definitely increase the cost of borrowing for the industry, while availing of ECB for airlines and other sectors will now become particularly difficult.
05/05/12 Himani Kaushik/Financial Express
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