Mumbai, Feb 12: India Inc is leaving no stone unturned to put up a brave face before Moody's Investors Service, the international rating agency which this week kicked off a review exercise for a possible downgrade of the country's sovereign rating. DSP-Merrill Lynch is helping the government in projecting India in the right light -- as a land of investment opportunities.A three-member team from the Cyprus-based Moody's Interbank Credit Service Ltd is in Mumbai currently meeting representatives of banks and financial institutions. Another three-member team of senior executives of the sovereign rating cell of Moody's is in India meeting bureaucrats and finance ministry officials.
In January, Moody's had announced its intention to review India's Baa3 country rating for a possible downgrade. A negative outlook was assigned to the country's rating in March last year, when Moody's introduced outlooks for the country ceilings.
Moody's Interbank Credit Services Ltd -- represented by its managing directorElisabeth Jackson Moore, associate analyst Constantinos Pittalis and assistant vice-president analyst George Mouskides -- have al ready met the top brass of the State Bank of India, ICICI and the Industrial Development Bank of India.
At all meetings, bankers and institutional chiefs have been talking in one voice to present a uniform picture of India Inc. The decision to adopt a uniform approach was taken at a meeting of senior bankers and institutional chiefs held at IDBI headquarters last Saturday. The meeting was attended by some senior analysts of DSP Merrill Lynch.
The investment bank has prepared a 109-page, 10-chapter booklet on how to project the country before the global rating agency -- Republic of India: A Position Paper. The booklet focuses on all macro-economic indicators -- from fiscal policy to exchange rate policy, deepening of domestic debt markets to capital market reforms. The focus is also on the irreversible process of reforms and political stability.
North Block bureaucrats willuse the same database when they meet the Moody's team. "The idea is to speak the same language on the state of affairs," said a finance ministry source.
The position paper harps on the fact that India remains unaffected by the Asian flu as only 14 per cent of Indian exports are directed to the Asian countries.
The other positive aspect which the ministry will focus on is the growing domestic savings, which have risen to 26.1 per cent of GDP in the last fiscal.
The paper also states clearly that whichever political party assumes power at the centre, the reforms process is irreversible.
It predicts political stability at least for the next three-four years.The chapter on fiscal policy dwells on subjects like disinvestment, reforms in subsidies, changes in centre-state fiscal arrangements, phasing out of administered pricing mechanism, et al. Bureaucrats and bankers are also harping on reforms in money and foreign exchange markets like deregulation of interest rates, tightening of money supply, creationof a debt market with enough depth and inflation control.
The centre will also highlight the twin objectives of the Reserve Bank of India's latest monetary policy: price stability and availability of credit to support growth in real sector.
Attention will be drawn to the low short-term debt burden of the government and the southward movement of debt-to-GDP and total debt-service ratios. Outlining the achievements of the government in financial sector reforms, the paper also highlights the proposed Foreign Exchange Management Act (Fema) which is set to replace Fera and the RBI's deft handling of the forex market turmoil by taking the speculators head on.
On the industrial policy front, the government will harp on reforms in the infrastructure sector with special focus on the pioneering efforts by Orissa in restructuring its state electricity board.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
