Armed with the Budget proposals to cut the fiscal deficit, the finance ministry will pitch for a ratings upgrade at a series of meetings with the global agencies in the next 2-3 months.
“Representatives from Standard & Poor’s (S&P) and Japan Credit Rating Agency (JCRA) are scheduled to meet the finance ministry officials on August 12 and August 28.
“Representatives of rating agencies Fitch and Moody will come probably in September-October. We will pitch for a rating upgrade," a senior finance ministry official said.
The official said the finance ministry will impress upon the rating agencies the resolve of the government to contain fiscal deficit at 4.1% this year and lower it to 3% by 2016-17. To promote growth and investment, finance minister Arun Jaitley in his Budget speech had included measures to support faster economic growth, such as allowing greater foreign direct investment in insurance and defence, increasing spending on infrastructure, and introducing tax incentives for savings and investment.
S&P currently rates India as ‘BBB-', the lowest in the investment grade, with a negative outlook. Any further downgrade will push India’s rating to the junk status, making it difficult and costlier for Indian entities to borrow funds overseas.
Moody’s assigns a ‘Baa3’ rating on India, with a stable outlook.