Standard & Poor Reduces India’s Investment Outlook

• Financial Drain. The BMC has sent the central government a detailed report seeking additional funds for the Brihanmumbai Stormwater Drainage (Brimstowad) project, the completion of which is believed to be crucial in preventing the occurrence of a deluge of the kind that struck the city on July 26, 2005. So far, only about 99kms of the century-old network of 382kms of drainage pipes have been replaced, while the cost of the project has tripled to Rs1,200 crore from the original estimate of Rs3,900 crore. [The Times of India]

• Poor Rating. Citing inadequate economic reforms, international credit ratings agency Standard & Poor has reduced the outlook on India’s sovereign rating from stable to negative, and suggested the possibility of a downgrade of the country’s creditworthiness if “economic growth prospects dim, its external position deteriorates, its political climate worsens, or fiscal reforms slow”. While the Sensex dropped 100 points and the rupee fell against the dollar after the announcement, finance minister Pranab Mukherjee said there was “no need to panic”. [The Times of India]

• Bofors and After. Former Swedish prosecutor Sten Lindstrom recently revealed in an interview that he was the “Deep Throat” or whistleblower in the investigation into the Bofors arms deal. Lindstrom said that former Prime Minister Rajiv Gandhi did not receive any kickbacks, but also that Gandhi’s government did little to pursue the case against absconding Italian businessman Ottavio Quattrocchi. [DNA]