R&I, Indian government to discuss ratings review

The Dollar Business Bureau

As a part of the annual practice of reviewing India’s credit rating system, Japan’s credit rating agency, Ratings and Investment Information (R&I) will be holding discussions with the senior officials of the Finance Ministry on Monday.

R&I had given a “BBB” investment grading to India last year, for its ‘stable’ outlook, marking the sufficient credit worthiness of the country. However, the agency specified that India needs to focus on specific factors considering the changing environment globally.

A Finance Ministry official said, “The representatives of R&I are coming to India for consultations. The ministry will showcase the steps being taken to contain fiscal deficit and promoting growth on sustained basis.”

R&I, is a Japan based rating agency with its headquarters in Tokyo. It is one of rating agencies along with Moody’s, Fitch, Standards and Poor which provides sovereign ratings to India after consulting the government officials.

The officials who will be attending the meeting from the Finance Ministry include Arvind Subramanian, Chief Economic Advisor and Shaktikanta Das, Secretary, Economic Affairs.

The other factors that would be discussed during meetings are regarding the latest subsidies reduction program, the declining inflation and also the government’s commitment towards the new tax jurisdiction.

Apart from this, the discussion will also emphasize the steps that have been taken by the government to improve the ease of doing business and also enhance the self-employment opportunities through “Start Up India, Stand Up India” and “Make in India” initiatives. The meeting will also see the discussion about organizing the regimen of Foreign Direct Investment.

S&P and Fitch have given a “BBB” rating to India, the lowest investment grade rating and Moody’s have given “Baa3” ratings.

The biggest six global rating agencies that assign sovereign credit ratings are Standards and Poor, Moody’s, Fitch, Rating and Investment Information, Japan Credit rating agency and DBRS. However, Moody’s S&P and Fitch are considered the Big three of the credit rating agencies as they control approximately 95% of the rating business.