Briefing reporters after the meeting, Sinha said: ``The agency has cited deterioration in the fiscal deficit as one of the major reasons for the downgrade. It is not true. The deficit will remain within the budgetary estimates.''

The situation is almost the same as it was in June when Moody's had downgraded India and, hence, there was no reason for S&P to do the same, said Sinha. "I can only say that I do not agree with the step taken by S&P and there was absolutely no need to make such a move."

International rating agencies have become overcautious in the aftermath of the south-east Asian crises, he said, adding that the Resurgent India Bonds issue, which followed thetwo-notch downgrade by Moody's in June, was a roaring success.

Expressing surprise and disappointment, he said there was no event in the last few months during which India was put on a rating watch that warranted a downgrade.

He said that S&P's reasoning to downgrade India was not justified as the fiscal deficit was going to be contained at 5-6 per cent of the GDP as was pointed out in the budget. The government was determined to keep it that level, he added.

A package for boosting the economy can be expected in the next 10-15 days, said Sinha.

Speaking to newspersons during his visit to SEBI, the minister said: ``Let the market decide what is right or wrong. The ministry is closely watching the situation and adequate measures including that of introduction of buyback of shares would be taken at an appropriate time", he said.

Sinha, however, declined to comment on the confidence crisis at the Unit Trust of India (UTI). ``Whatever needs to be done will be done at the appropriate time,'' hesaid.

SEBI chairman DR Mehta felt that it was for the government to decide whether UTI's flagship scheme US-64 should be treated as a savings scheme or a mutual fund.

"I have come to SEBI to take stock of the present capital market and the steps that need to be taken for its revival," he said.

"The capital market will revive in the next few months and I am confident that the outlook will improve on the whole," Sinha added.

Sinha said that with a number of large projects in the pipeline, economic activity will pick up soon. He said that all major construction and commercial activities would generally pick up after the monsoon.

Expressing his confidence over the revival of the economy, he said that all projects that got cleared by his ministry would start getting off the ground with increased allocation of funds from the government mainly for infrastructure projects. "I am absolutely confident that the government will meet its disinvestment target. With the Concern disinvestment kicking off, theother three would also be seen through," he said.

Later in the day, Sinha addressed the Indian Business Council meeting, where he said that his ministry had begun work for the next budget, which would be a vastly improved one over the current year's. The next budget will simplify both the direct and indirect taxes' norms.

``I had just two months to prepare this year's budget,'' he said and reiterated that the revenue deficit would be controlled in a bid to check the fiscal deficit.

Sinha said the government would not resort to high borrowings in a bid to check interest rates, and make resources available to businesses.

He expressed his helplessness to provide Rs 1,000-crore grant to the Maharastra government as this would strain the fiscal deficit.

``My government will prove that S&P's impression about the fiscal deficit is wrong,'' he said, adding that the effect of the sanction had tapered off.

As the US policy-makers are now empowering president Bill Clinton to remove sanctions against India,it is now a problem for the US rather than for India, he said.