India's sovereign credit outlook was lowered to negative from stable by credit rating agency Standard & Poor because of the widening current account deficit.
Last year, Greece had earned the world's lowest credit rating by S&P which said the nation is "increasingly likely" to face the first sovereign default in the history of Europe.
Jaitley said, "India's rating has lowered down from stable to negative and now it's BBB minus which is slightly above Greece. The government has to take the blame for the Indian economy's mismanagement, which is putting India at par with the countries like Azerbaijan, Croatia, Iceland and Uruguay."
He said as a result of downgrading, India will find it difficult to attract foreign investment and will have to pay higher interest rates to get loans.
While analysing the critical condition of Indian economy he said, " Firstly, the downgrading of economy is due to lack of authority in the Prime Minister's Office, which is unable to take decisions on economic reforms. Secondly, the United Progressive Alliance government faces a leadership deficit."
Jaitley accused the government of lack of positivism, which is also affecting the economy.
He said, "The mood of the government is downbeat, generally. This government is not able to take any policy decisions because people in government are afraid that the organisation (the Congress party) may not like it. Because to this (fear) the government is taking decisions only for vote gathering and not for growth of the country.
The senior Bharatiya Janata Party leader also accused the government of being unable to form any consensus on issues of national interests with not only the opposition parties but also its allies.