US downgrade to have impact;no need to press panic button: FM

New Delhi, Aug 6 (PTI) The downgrading of US sovereign
rating will have some implications on India, but there is no
need to press panic button as fundamentals of the economy are
strong, Finance Minister Pranab Mukherjee said on Saturday.
"There is a crisis, but I am not unnecessarily worried.
There is no point of pressing the panic button," he said a day
after global stock markets, including India's crashed, wiping
billions of dollars out of investors' wealth.
"There have been difficulties and there has been some
sort of a crisis... particularly the downgrade of US has its
adverse impact," he said at a CII function here.
Rating agency Standard and Poor's has lowered of the
sovereign credit rating of the US to AA+ from AAA, a
development which raises concerns that investors will lose
confidence in the American economy.
The downgrade, Mukherjee said, will further aggravate the
global economy which still is reeling under the after effects
of 2008 meltdown.
He, however, stressed that India would "continue to
achieve appreciable growth despite negative sentiments across
the world."
This downgrade came a day after the global stock markets
witnessed a bloodbath. The Bombay Stock Exchange benchmark
index, Sensex, plunged more than 700 points before staging
a partial recovery with investors selling across the board.
"These sentiments in the developed nations affected our
markets on last Friday. But we witnessed some recovery already
and this is testimony to our capacity for resilience," he
said.
India has taken several measures to make its market
attractive, robust and vibrant and would continue to make it
an attractive investment destination for foreign capital, the
Finance Minister said.
Mukherjee, however, expressed concern over high
inflation.
"Our major challenge in the short-term is inflation,
which has implications of sustaining our growth momentum," he
said.
He said inflation pressures "persist both from
higher global commodity prices and domestic structural
demand-supply imbalances in several commodities".
Mukherjee said that India has moved to higher GDP growth
trajectory of 8.5-9 per cent and today is the "second
fastest growing economy in the world, and is widely expected
to be among the top three economies in the next two decades".
He also called for improving business sentiments to
"restore investment growth seen in the years before the global
crisis."
Chief Economic Advisor Kaushik Basu said it was time
India focused on sustaining its growth.
"Instead of wasting time ...debating whether S&Ps is
doing a good job, we should redouble our effort to keep up our
excellent track record of growth," he said.