Finmin gears up for global rating agencies
With India’s credit rating is languishing at just a grade above junk, the government is gearing up to pitch for an upgrade when the ratings agencies such as Fitch and Moody’s start visiting North Block on the Capital’s Raisina Hill, which houses the offices of the finance ministry, to interact with officials to get an overview of the Indian economy.
This is a crucial exercise as these ratings determine India’s credit worthiness and the borrowing rates it gets. Moody’s has kept India in the lowest investment grade category “Baa3” with positive outlook, though this is an improvement over two years earlier.
Keeping in mind these visits, economic affairs secretary Shaktikanta Das recently met with the officers of his department to ensure full preparedness. Das’ department is tasked with ensuring that the Indian economy can present its best face to the agencies.
He has directed his officers to create presentations for the agencies, including listing all reforms undertaken by the government, including reining in the fiscal deficit and India’s import bill, controlling inflation as well as the various reforms measures it has set in motion since coming to power. Moreover, India is being repeatedly held up by global agencies such as World Bank, IMF and even China as a beacon of hope for global economic growth.
Rating agencies have red-flagged the NPA situation in public sector banks as impacting India’s rating. The NPA ratio of public sector banks rose by about `1 lakh crore to `3.93 lakh crore at the end of December 2015, from about `3 lakh crore at September-end, but the government and RBI have been pressing down hard on them to contain this problem.
Sources said Das has asked the officials to study recent reports on India by rating agencies and to ensure their apprehensions are mitigated.