Apex industry chambers on Wednesday asked the Government to put aside its political compulsions and push for reforms. Reacting to Standard & Poor's cutting India's rating outlook, industry associations said that India's fundamentals are strong enough to carry a higher debt burden for some time.

On the back of slowing growth and widening current account deficit, global rating agency, S&P, has revised India's outlook from stable to negative, while reaffirming its BBB- rating.

Dr S P Sharma, Chief Economist at PHD Research Bureau, said, The ratings could stabilize if the Government implements initiatives to reduce fiscal deficit and improve investment climate. India's real GDP per capita growth will likely remain moderately strong at 5.3 per cent in the current fiscal, compared to 6 per cent average over the prior five years.

CII said the Government should push for reforms, especially in the areas of Foreign Direct Investment, Goods and Service Tax and Direct Tax Code.

CII strongly feels that further opening up India in sectors such as aviation, insurance and multi brand retail will help improve investor sentiment, it said in a statement.

Industry chamber, ASSOCHAM, has stressed on fiscal consolidation to reverse outlook. This will include removing subsidies for fuel, fertilisers and social schemes. However, India remains an attractive investment destination, said Secretary-General, Mr D.S. Rawat.

Ms Sonal Varma, Executive director and India economist at research agency Nomura, said, We believe there is a low likelihood of a rating downgrade actually occurring as we expect the economy to see some cyclical rebound in the near term. The debt-to-GDP ratio is likely to remain stable, and the fiscal deficit should not worsen substantially. The only risk to this view is foreign exchange reserves declining materially.