JOIN USGovt pitches for rating upgrade
The government on Thursday pitched for India’s credit rating upgrade with global rating agency Fitch saying key steps announced in the Budget will boost economic growth and spur investment.
Finance Ministry officials met representatives from Fitch for a post-Budget presentation. Fitch had hailed the Budget presented on February 28 for the government’s continued focus on implementation of structural reforms, but had said that the medium-term fiscal consolidation strategy was “less aspiring” than in the past, which was a negative from a sovereign rating perspective.
The reaction from Fitch came after Finance Minister Arun Jaitley announced in the Budget that fiscal deficit would be brought down to 3.9 per cent of GDP in 2015-16, and then further to 3.6 per cent and finally to 3 per cent by 2016-17 and 2017-18, respectively.
The officials highlighted the government’s commitment to stick to targets set for the fiscal as well as the current account deficits in their presentation before Fitch. “There are a number of reasons for a positive economic outlook. Inflation has come down, growth has picked up, a number of reform measures have been announced and we are well on the path of fiscal consolidation. There is no reason why ratings agencies should not be looking at upgrading India,” Chief Economic Advisor Arvind Subramaniam said after the meeting.
Subramanian said that the officials had explained the reasons why India delayed its FRBM targets by two years. The agency was apprised of the recommendations made by the Fourteenth Finance Commission, and the increased devolution to states, he said.
Global rating agencies Fitch, S&P and Moody’s have assigned lowest investment grade rating to India, although with a stable outlook.