Buoyed by a sovereign rating upgrade by international rating agency Moody’s in November last year, the Finance Ministry on Wednesday will pitch for a similar upgrade with global agency Fitch, PTI reported. The government will put forward the taxation and PSU bank reforms brought by it in front of the global rating agency. Chief Economic Advisor Arvind Subramanian and Economic Affairs Secretary Subhash Chandra Garg and a few other finance ministry officials will meet Fitch representatives tomorrow, PTI reported citing unidentified sources. The rating agency kept India’s sovereign rating unchanged at ‘BBB-‘ with stable outlook. In 2006, Fitch upgraded India’s rating to BBB- from BB+ with stable outlook. Thereafter, the rating was changed to negative in 2012.
The government is likely to pitch its efforts to hike taxpayer base post note ban, arrest widening fiscal and current account deficit and working on fiscal consolidation roadmap. Moody’s raised India’s rating from Baa3 to Baa2. High debt burden of the government restricts chances of India’s rating upgrade, Fitch had said post budget 2018.
The tax authorities have pegged the direct tax collection target at Rs 10.05 lakh crore for 2017-18. Last year, the government introduced a Rs 2.11 lakh crore bank recapitalisation programme for public sector banks. The same bank recap plan may also be highlighted with the Fitch officials as this shows government’s efforts to reform the account books of debt-stressed public sector banks, PTI report said. Even Moody’s praised India for coming out with such a recapitalisation plan to revive country’s banking sector at a time when non performing assets have risen above the danger mark. The bank recap plan in PSU banks is “significant credit positive” said Moody’s after the government made this announcement. The amount of Rs 2.11 lakh crore would be infused in the public sector banks over two years. The Finance Ministry may also showcase the insolvency and bankruptcy code introduced by it to help in early resolution of stressed assets. The ministry may also highlight the revised RBI framework to deal with the NPAs.