Finmin pitches for a better rating outlook with Moody’s

Finance Ministry officials and representatives of rating agency Moody’s on Tuesday discussed economic growth prospects, during which India pitched for an upgrade in its sovereign rating outlook.

Sources said the meeting was attended by Chief Economic Advisor

K V Subramanian and other officers from the Department of Economic Affairs and Moody's analysts.

The meeting is a precursor to Moody's annual sovereign rating action. Moody's Investors Service had last year downgraded India’s sovereign rating to ‘Baa3’ from ‘Baa2’, saying there will be challenges in the implementation of policies to mitigate risks of a sustained period of low growth and deteriorating fiscal position.

The outlook on the sovereign rating is negative. During Tuesday's meeting, finance ministry officials highlighted the upward trajectory of GDP growth seen in the June 2021 quarter and also the fiscal deficit and borrowing numbers. The Centre's fiscal deficit in the Apriljuly 2021 period came in at only 21.3 per cent of full-year budget estimate (BE), mainly on account of curbs on expenditure and a rise in tax and non-tax revenue collection.

In the same period last fiscal, the deficit was 103 per cent of the annual target. In line with its Budget estimates, the Centre has announced it would borrow ~5.03 trillion in the October-march period.

The meeting is a precursor to Moody's annual sovereign rating action