India pitches for rating upgrade by S&P on strong macro data

New Delhi, August 31

India today pitched for rating upgrade by Standard and Poor’s (S&P) citing strong macroeconomic indicators, low inflation and improvement in fiscal and current account deficits.

In his presentation to the visiting S&P officials, Chief Economic Adviser (CEA) Arvind Subramanian said the country has strong medium-term growth potential on the back of persistent economic reforms which are being pursued by the government. S&P has BBB- rating on India with stable outlook.

According to sources, Subramanian also expressed the government’s commitment to implement the Goods and Services Tax (GST) Bill and said the country’s growth in the current fiscal was expected to improve to around 8%.

Subramanian based his optimism for higher growth on macroeconomic stability, better-than-expected monsoon and cumulative effect of reforms.

S&P, according to sources, inquired about time line for implementing the GST Bill and also plans for setting up a holding company to deal with the problem of stressed assets in the banking sector.

Banking Secretary Hasmukh Adhia, who has been appointed as the Revenue Secretary, highlighted the steps taken by the government to enhance governance reforms and encourage accountability.

Adhia is reported to have told the S&P officials that Asset Reconstruction Companies (ARCs) were functioning and there was no need for setting up a holding company to deal with the problem of stressed assets.

He also spoke about the government’s plan to infuse fresh capital in the state-owned banks and added there was no shortage of credit in the banking system.

S&P officials, according to sources, inquired about the plans of the government to deal with impact of the turbulence created by devaluation of yuan by the Chinese government. — PTI