India insisted on Saturday its economy would still grow strongly despite the "grave" situation created by Standard and Poor's decision to strip the United States of its top-rank AAA credit rating. S&P sent shock waves across the world when it cut the US rating on Friday from AAA to AA+ with a negative outlook, saying US politicians had been unable to come up with a credible plan to tackle the country's huge debt load.
"The situation is grave," Finance Minister Pranab Mukherjee said. But "our markets have the capacity to withstand the negative sentiments affecting the external world," he told business leaders in a speech in the Indian capital. "There is a crisis but I'm not unnecessarily worried. There's no point in pressing the panic button," he said, a day after India's stock market plunged to a more than one-year low on worries about the global economy. Mukherjee forecast Asia's third-largest economy would be able to match in the current year the eight-and-a-half percent growth it notched up in the previous 12 months to March 2011.