Global ratings major Standard & Poor's (S&P), which has threatened to downgrade the country's sovereign rating to junk, expects India's economic growth improving to 6.4 percent next fiscal on higher spending and better show in agriculture sector, reports PTI.

The agency also retained its growth forecast for the current fiscal at 5.5 percent, half-a-percentage-point above the readings by the Central Statistical Organization (CSO).

Credit analyst Geeta Chugh said, "The increased government welfare spending because of the next general elections, improvement in private consumption, lower interest rates and a better show by agriculture will lead to the growth number going up to 6.4 percent in FY14."

Chugh said the growth rate will go up further to 7.2 percent in FY15, as mining and power sectors will also start showing improvement.

The comments come within a fortnight of the CSO forecasting a five percent growth of GDP in the current fiscal, lowest in a decade.

Chugh, however, clarified that the relative uptick in growth has already been factored in the sovereign rating, which is the lowest investment grade rating and the worst amongst the BRIC.

The agency had cited a host of concerns including the sagging growth numbers, fiscal imprudence and lack of policy initiatives in the past as the pain areas.

Finance Minister P. Chidambaram took various measures, which led to an increase in investor confidence. The minister has repeatedly stated that his ministry was committed to adhering to the fiscal deficit targets and pegged the number for this year at 5.3 percent.

RTTNews