New Delhi: Describing the downgrade warning by Standard and Poor's as a "wake-up" call, the BJP on Tuesday ruled that the UPA government is still in denial mode about the economic crisis and claimed that this was a result of the governance deficit and differences within the dispensation.

"Standard and Poor's downgrade warning is a wakeup call for India... Instead of amending and carrying out mid-course correction, the UPA government is as usual in denial mode. The denial won't work as international investors accord much credence to the ratings by the ratings agency," BJP spokesperson Prakash Javadekar said.

He warned that such downgrades will adversely impact the already deteriorating Indian economy. It will make international borrowing costly for Indian companies.

The international ratings agency had warned that India may lose its "investment grade" and may become the first "fallen angel" among BRICS nations.

"The BJP is consistently pointing out that governance deficit in the UPA government is causing an irreparable loss to the country. There are differences within the Congress, within the Cabinet, between the coalition partners and between 10, Janpath (Congress President's residence) and 7, RCR (PM's residence)," Javadekar said.

He charged that the outcome of this is a "complete policy paralysis, evident in every field of decision making".

He also posed some questions to the government, "Can the Finance Minister deny that growth has come down to 5.3 percent and Index of Industrial production has fallen from 5.3 percent to 0.1 percent on a year-on-year basis?"

Javadekar pointed out that the current account deficit had crossed four percent of the GDP and is being financed by short term borrowings.

"How can the finance minister deny that the fiscal deficit is far beyond the estimates and stands at a whopping 6 per cent? How can FM deny that the basic interest rates have gone up from 5 to 8 per cent and are hurting the competitiveness of India in exports," he asked.

The BJP also alleged that the textile sector is experiencing a huge deficit and has laid off more than 1.5 million workers and it is the same story in case of the small and medium enterprises.

"The government must improve the track record and show that it has a political will and is ready to govern. Losing investment grading is not a good thing and government should not make virtue out of it. Only action will reassure investors that there is no systemic decline and situation is reversible," Javadekar said.

He alleged that there is sluggish infrastructure growth, no big decisions are being taken and there is "no hope of progress on the charted course".

(Agencies)

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