With the upcoming General Elections, India’s wait for an upgrade in its sovereign rating could be pushed back to October, when international rating agencies will take a call on the country’s economic situation.
The issue is understood to have been brought up on Monday when global rating agency Fitch met senior finance ministry officials including economic affairs secretary Arvind Mayaram to review the country’s economic scenario.
“Typically, rating agencies come for a review meeting in May or June but it has been pre-poned this year due to the General Elections and government formation that will take place around then,” said a senior finance ministry official.
But, while Fitch was upbeat about India’s fiscal policies and economy, it can only revise its sovereign rating after a period of 12 months.
“This year, they seemed more optimistic compared to last year when they were very aggressive. But while they did not promise an upgrade in the ratings, they said a revision can only take place after 12 months,” said the official.
Fitch currently rates India at BBB-, with a stable outlook.
“I think they (representatives of Fitch) expressed satisfaction on the overall macroeconomic situation. In fact, they also assessed that from the last time they had come, the situation now is much better,” said Mayaram, adding that the rating agency raised concerns on the non performing assets (NPAs) of banks.
“However, the NPAs, as assessed today, are not anywhere above the benchmark and therefore it is not something where there is certainly a red light would be,” he said.