New Delhi: In a sharp reaction to the downgrading of Indian economy by Standards and Poor, BJP on Wednesday alleged that policy paralysis within UPA government, lack of decision-making powers with Prime Minister Manmohan Singh and arrogance of this regime has led to this state of affairs.

"The possibility of India being downgraded as an economy from stable to negative is extremely disturbing. The consequences for the Indian economy are very grave. Investor confidence in India could decline further. International borrowings will become costlier," Leader of the Opposition in Rajya Sabha Arun Jaitley said.

He maintained if the grading is at a negative level, India is in the company of countries where the economy is doing badly.

"The Indian growth story has suddenly turned sour. The responsibility for this goes exclusively to the government. It is the policy paralysis of the last few years and misconceived priorities of the government which are exclusively responsible for this mess," Jaitley said.

International rating agency Standard and Poor has downgraded India's rating from BBB+ to BBB-.

 BJP insisted political and economic correctives by the government would be required to come out of this crisis.

The opposition hinted at differences between the government and Congress as the reason for "indecisiveness".

 "I am sure the Prime Minister knows what the problem is and there should be a vestige of political authority in him to take the economic decisions on behalf of this government. He must display leadership at this hour," Jaitley said.