Govt meets Fitch officials, seeks credit rating upgrade

The Dollar Business Bureau

Underlining India’s strong macroeconomic parameters, the government on Tuesday held a meeting with the global credit rating agency Fitch and pitched for an upgrade in the country’s credit rating.

Finance ministry officials explained to the agency about the government’s intended fiscal disciplines while indicating that the Union Budget 2017 will spur economic growth in the country.

Recently, several credit rating agencies have denied providing an upgrade to the country’s credit ratings, citing reasons such as stressed balance sheets of corporates as well as banks.

The government officials also asked Fitch to explain how it rated the credit ratings of any country. The Fitch officials, in turn, explained that they considered the government’s structural reforms, which are intended for long-term economic growth of any country.

Fitch also gathered information about the bad loan situations and the status of the country’s labour reforms. The officials also detailed the various economic parameters that they considered, before giving ratings to a country.

Fitch has given an investment-grade BBB-sovereign rating with stable outlook to India.

In the past, the Indian government has often questioned the credit rating agencies and accused them of ignoring various recent reforms. Economic Affairs Secretary Shaktikanta Das had earlier said the rating agencies’ methodologies are far from realities and that it should not be overlooking the latest reforms.

"Last October, when we went for the annual meeting of World Bank and IMF along with the finance minister, there also in our interaction with several investors, we were surprised how the rating agencies did not upgrade India," Das said.

"Look at our GDP, compare it with other countries. Look at our macroeconomic number inflation, current account deficit and compare them with other countries. Now, I really do not understand. I think rating companies are missing out on something which only they can explain," he said.

The Chief Economic Advisor Arvind Subramanian had also slammed rating agencies for continuing with defunct standards, and for not considering several reform measures such as GST.