Indian economy is on upward trajectory and the global rating agencies will take note of the development, Finance Secretary Arvind Mayaram said on Saturday.
“The Indian economy is on upward trajectory and this has been noticed globally and therefore, I am quite confident that the rating agencies will notice this,” Mayaram said while addressing the press conference to mark 100 days of the NDA government.
He was replying to a query whether in light of India’s economic growth in the first quarter rising to two-and-half year high of 5.7 per cent, global rating agencies like Moody’s and Standard & Poor’s would upgrade India credit rating.
Representatives of S&P had met senior finance ministry officials on August 12. Representatives of rating agencies Fitch and Moody’s will come in September-October.
The Finance Ministry officials are reported to have informed S&P about the government’s road map to reduce fiscal deficit to 3 per cent by 2016-17.
“We all believe numbers (fiscal deficit and current account deficit) are very credible. We will able to meet this year’s fiscal deficit target,” Mayaram had said after meeting with S&P representatives earlier in the month.
He had also expressed the hope that the government will be able achieve disinvestment target of around Rs 58,000 crore for the current fiscal.
Improved performance of mining, manufacturing and services sector has pushed India’s economic growth rate to 5.7 per cent in the April-June quarter, a development which the Finance Ministry expects to continue for rest of the fiscal.
India’s GDP growth had expanded by 4.7 per cent in the April-June quarter of the last fiscal ended March 31. In the January-March period (last quarter of 2013-14), it was 4.6 per cent.
In order to promote growth and investment, Finance Minister Arun Jaitley in his budget 2014-15 has announced host of measures to accelerate economic growth. The measures included 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. The agency frequently updates its credit rating.
Moody’s has assigned a ‘Baa3’ rating on India, with a stable outlook.
Fitch has affirmed India’s long-term foreign and local currency issuer default rating (IDR) at ‘BBB-‘ with stable outlook, indicating low default risk.