V Anantha Nageswaran, the chief economic advisor (CEA) and other top officials of the Union finance ministry are slated to meet senior executives of global rating agency Moody's on June 16 to pitch for sovereign rating upgrade for India, according to news reports. A report by the Economic Times said that senior government officials will highlight India's strong growth outlook, cooling inflationary pressure and other robust macroeconomic gauges for the “well-deserved upgrade”.
Moody's Investor Service retained its sovereign rating on India at 'Baa3' with a stable outlook last year, mentioning “the stable outlook reflects our view that the risks from negative feedback between the economy and financial system are receding”.
The finance ministry held talks with two other global rating agencies, Fitch and S&P, earlier this year on these issues. Fitch kept India's sovereign rating at 'BBB-' with a stable outlook on robust growth and resilient external finances but mentioned weak public finances remain a challenge. Since August 2006, India's rating has been unchanged at 'BBB-', the lowest investment grade.
S&P Global Ratings retained India’s sovereign rating at 'BBB-' with a stable outlook, mentioning the strengths lie in a fast-growing economy and strong external balance sheet but pointed out weak fiscal performance and low GDP per capita.
The financial daily quoted an official as saying, India will remain the world's fastest-growing major economy in the current financial year and next. Retail inflation, including core inflation, has fallen significantly and current account deficit concerns have eased considerably, “making a strong case for an upgrade for India”.
Fiscal deficit has been moderating and the government is committed to cut it further to 4. 5 percent of the GDP (from 6. 4 percent in FY23) in FY26. States have shown great progress in reining in their fiscal gap.
“Even the Centre's debt level is expected to rise at a slower pace than the nominal GDP in the current fiscal, which means debt sustainability is not an issue,” he told the daily, saying that India's external debt remains at a comfortable level.