Global rating agency Standard & Poor's said it is evaluating policies of the Narendra Modi government for a review of India's sovereign rating, now pegged at the lowest investment grade.
“We are evaluating the new government's policies and are forming a view on the likelihood of their success," S&P analyst Agost Benard told PTI when asked if the agency was contemplating a review of India's sovereign rating. “Any rating implications or possible changes to the outlook on the rating will be communicated to the market and the media through the usual channels,” he said in the e-mail reply.
S&P representatives had recently held extensive discussions with the finance ministry officials. The agency, however, refused to share the details saying it is "confidential".
The finance ministry officials had impressed upon the agency the government's resolve to push economic reforms, promote growth and contain fiscal deficit at 4.1% in 2014-15, sources said.
They are reported to have informed the S&P about the government's roadmap to reduce fiscal deficit to 3% by 2016-17. To promote growth and investment, finance minister Arun Jaitley, in his Budget speech had announced a host of measures to accelerate economic growth. The measures included allowing greater foreign direct investment in the insurance and defence sectors, 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. The agency frequently updates its credit rating.