NEW DELHI: Finance ministry is planning to pitch for a sovereign rating upgrade from Moody’s Investors Service, as it is planning to meet them on September 28.
Finance ministry officials plan to meet the Moody’s to provide details on how India will meet its budget targets for the current fiscal year, according to Bloomberg, citing sources.
“Ministry keeps on meeting rating agencies updating them with the fiscal situation. This is a routine process. Certainly, we will push for rating upgrade,” an official in the finance ministry told TNIE.
Officials said that the meeting will involve budget plan, fiscal path and recovery in the economy and revenue collection after the second wave.
Moody’s Investor Service had downgraded India’s sovereign rating to the lowest investment grade on June 1, 2020 to ‘BAA3’ from ‘BAA2’ and also maintained the outlook from ‘stable’ to ‘negative’.
Baa3’ is its lowest investment grade — just a notch above junk status. It had then cited policy challenges in addressing a prolonged economic slowdown and its deteriorating fiscal position.
“The decision to downgrade India’s ratings reflects Moody’s view that the country’s policy-making institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector,” it had said in a statement.
The Indian economy contracted 7.3% in FY21 but is expected to clock double-digit growth during the current fiscal.
Lowest rating grade
Moody’s Investor Service had downgraded India’s sovereign rating to the lowest investment grade on June 1, 2020 to ‘BAA3’ from ‘BAA2’.