Global rating agency Standard and Poor's on Thursday changed its India sovereign credit outlook to stable from negative. S&P revised its ratings to BBB- in long-term and A-3 in short-term.

S&P expected that the country's fiscal deficit position would improve over the next few years while growth rate continuing its strong momentum. Earlier, in the Union Budget presented last month by Finance Minister Mr. Pranab Mukherjee, the government unveiled that it targets to cut down the government deficit to 8.3 per cent by the end of financial year 2010-11 from current deficits of 9.8 per cent.

The government is currently planning for a medium-term fiscal consolidation as suggested by the 13th Finance Commission. The commission in its report suggested that the government deficit should be reduced to 5.4 per cent while the government debt is reduced to 68 per cent of the country's gross domestic product (GDP) by the end of financial year 2014-15.

Apart from expecting that India would grow at around 8 per cent in FY 2011, S&P also mentioned that the country's external position looked really resilient and its external financial position looked to remain stable.