India pitches for Standard & Poor's rating upgrade to rein in fiscal deficit and spur ... - India Today

The finance ministry has pitched for rating upgrade with ratings agency Standard & Poor 's (S&P) in view of the measures taken to rein in fiscal deficit and the fresh attempts to spur investment. S&P and its rival Fitch Ratings had both lowered their outlook on India to negative last year raising the danger of the country's sovereign rating being downgraded to 'junk' status. In their meeting with S&P on Thursday, government officials made out a case for rating upgrade. "We are simply saying we have taken strong, hard decisions," economic affairs secretary Arvind Mayaram told reporters here after the meeting. "This country has shown its determination to put the economy back on track. We believe it will happen," he said referring to an upgrade. Earlier this month, the ministry had held similar discussions with Fitch for an upgrade. Both Fitch and S&P rate India at BBB minus with a negative outlook, the lowest investment grade among the BRICS group of large emerging economies. A c ut to 'junk' would force some foreign investors to pull their funds from the country increasing the cost of credit for Indian firms in overseas money markets. The downgrade in the outlook had come in the wake of a worsening fiscal deficit and a slowing economic growth rate with a policy drift holding up vital economic reforms and several big projects in the power, ports and highways sectors getting stick in the pipeline. In January, S&P said that the possibility of India losing its investment-grade credit rating had receded somewh at as a result of economic reforms undertaken by the government. These included an increase in diesel prices and a cap on subsidised cooking gas for households in order to bring down the fiscal deficit. Ministry officials say the actual deficit for 2012/13 could be around five per cent. The government had also cleared proposals to bring in more foreign investment in retail trading and commercial airlines to push up the growth rate. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFfWPoInGmV1wFTcvKlDRQQN0a7eQ&url=http://indiatoday.intoday.in/story/india-pitches-for-rating-upgrade-of-standard-and-poor/1/267701.html

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