Case exists for ratings upgrade: FinMin
The finance ministry feels there is a case for a rating upgrade of India by at least a notch or so and agencies like Standard & Poor’s (S&P) and Fitch would be conveyed this view when they visit India nexta month.
“I strongly believe there is a case for S&P and Fitch to upgrade. Even if it is one only notch or two notch above, but certainly there is no case for a downgrade,” said Arvind Mayaram, secretary, department of economic affairs. He said the two agencies are scheduled to visit next month when the finance ministry will present the state of the economy to them and highlight the steps that the government has taken to contain fiscal deficit.
“We are going to have discussion with rating agencies sometime in April. Fitch and S&P will come,” Mayaram said. “Moody’s will also come, but no time has been fixed yet,” he added.
Both S&P and Fitch had earlier threatened to downgrade India’s credit rating as an aftermath of the expansionary policy which led to a rising fiscal deficit. The fiscal deficit had touched a high of 5.8 per cent in 2011-12.
The government in the recent months has taken a host of reform initiatives, including liberalising foreign investment norms, partial decontrol of diesel and capping of subsidised LPG cylinders, with a bid to check the rising subsidy bill.
Besides, with a cut in expenditure it has been able to restrict the fiscal deficit for the current financial year at 5.2 per cent.The government
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