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S&P Global Ratings in its latest report has said that India will be one of the fastest growing emerging market economies with a 10 percent growth in FY22, and future sovereign rating action would hinge on lowering fiscal deficit and sustaining debt burden. It noted that the forecast for India in 2021 is on stronger side and shows that a lot of economic activity, which was frozen last year, is coming back on line to normalisation thereby brightening the growth prospects, as well as structural strengths of Indian economy coming back to the fore.

S&P said ‘India's contraction this year was steep and may be deeper than global average, but bounce back of 10% that we are expecting next fiscal year will be putting India amongst the fastest growers in 2021 and more importantly we see Indian economy growing at 6% over medium term, may be slightly higher, and that compares very well to EM all around the world.’

It further said India's economy has stabilised over recent months, with progressively better manufacturing, services, labour market, and revenue data. It also said the hard part will be converting these trends into a sustained recovery over the next few years. It added that India has exceeded its fiscal deficit target of 3.5 per cent in the current fiscal by a wide margin due to higher spendings to stimulate economy amid the pandemic.