FinMin to pitch for rating upgrade with S&P

Hopeful of keeping the 2018-19 fiscal deficit under target, the finance ministry officials are expected to pitch for a credit rating upgrade with the S&P officials who usually take stock of India's macroeconomic and fiscal situation by the end of August.

Sources in the ministry said the officials will apprise the S&P team of the pace of reform measures undertaken during the last one year in the Prime Minister Narendra Modi-led government.

The officials are preparing to give presentation on a number of initiatives including government steps on banking reforms, the pace of their recapitalisation and attempt to bring down bad loans.

Armed with tax buoyancy in both direct and indirect taxes front, the officials are expected to focus on how the move, specially on Goods and Services Tax, is working on improving the tax to GDP ration in India.

Finance Secretary Hasmukh Adhia and other secretaries in the ministry are expected to meet the S&P team but missing from the action this year will be the chief economic adviser of the finance minister. At present, the minister does not have one after incumbent Arvind Subramanian put in his papers last month.

Prior to this, credit rating company Moody’s Investors Service had upgraded India’s sovereign rating from the lowest investment grade of Baa3 to Baa2 late last year after a gap of 14 years. But Fitch had refused to do so saying India's weak fiscal balances continued to constrain its rating. It retained India's rating at the lowest investment grade of BBB- earlier this year.