INSUBCONTINENT EXCLUSIVE:
India today pitched for ratings upgrade with SP as the US-based agency discussed macro economic situation with the Finance Ministry here
against the backdrop of depreciating rupee and widening current account deficit (CAD), according to an official.
Rising oil prices, their
impact on government finances and increasing GST collections figured in the discussions between the Finance Ministry officials, led by
term consideration and should not be immediate concern for rating upgrade, he said.
Credit rating agencies have been raising red flag over
high debt to GDP ratio of India
Currently, the ratio stands at around 68.5 per cent.
The Fiscal Responsibility and Budget Management (FRBM) committee headed by former
A depreciating rupee puts pressure on the CAD, which is the difference between inflow and outflow of foreign exchange.
The government has
budgeted fiscal deficit to be at 3.3 per cent of GDP in current fiscal ending March 2019
Fiscal deficit during April-June quarter of current fiscal had touched 68.7 per cent of Budget estimates.
Another US-based rating agency
Moody's Investors Service had yesterday said there are risks to fiscal deficit breaching the 3.3 per cent budgeted for current fiscal as
higher oil prices will add to short term fiscal pressures.
Moody's also expects the CAD to widen to 2.5 per cent of GDP in the fiscal year
ending March 2019, from 1.5 per cent in fiscal 2018.
In November last year, SP had ruled out any upgrade in India's sovereign rating
through 2017 saying that it wants to see more efforts to lower government debt to below 60 per cent of GDP and that it did not expect
revenues to rise enough to meaningfully lower the deficit over the medium term.
It maintained the lowest investment grade rating of BBB-
with a stable outlook.
Another global agency Fitch had in April, 2018, retained India's sovereign rating at 'BBB-' with 's table'
outlook, saying that the country's medium-term growth potential is strong.
Moody's had, however, in November last year upped India's
continued economic and institutional reforms.
