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India's growth story credible, finance ministry tells Moody's

Economic Affairs Secretary Arvind Mayaram held a meeting with Moody's representatives on Tuesday. Rating agencies hold such meetings with government officials to access the economic situation.

BT Online Bureau | May 7, 2013 | Updated 16:51 IST

The finance ministry has told global rating agency Moody's that though the economic picture is not fully rosy, India's growth story is credible and the government is taking steps to deal with fiscal issues.

Last week the agency had said India's sovereign outlook is stable and does not warrant any action on the country's credit rating in the next 12-18 months. Moody's wanted to learn from the finance ministry officials, the steps taken to check subsidy outgo and impact of the proposed right to food bill on the exchequer.

Economic Affairs Secretary Arvind Mayaram held a meeting with Moody's representatives on Tuesday. Rating agencies hold such meetings with government officials to access the economic situation.

"...its not as if the picture is fully rosy... All we have said is that we know there are problems but we have to take actions in a particular manner and the government is fully committed to take action so that the problem that we are seeing today are fully addressed," Mayaram said.

In January, Moody's had reaffirmed 'Baa3' sovereign credit rating for India that indicates investment grade, with a stable outlook.

"We have a credible story that we have told them and they have appreciated what we have said. Now rest is upto them," Mayaram said.

While India's growth slipped to a decade's low of 5 per cent in 2012-13, the government has been able to bring down the fiscal deficit to 5.2 per cent of the GDP during the period. It also took tough decisions like raising diesel prices and pruning subsidies on LPG, fertiliser and sugar.

Mayaram said the fiscal numbers as well as the inflation situation has improved since the last meeting with Moody's representatives. The WPI inflation fell to three-year low of 5.96 per cent in March.

"We raised the same points but with additional numbers. Everyday the numbers improve... The last time we had met (Moody's) they (the numbers) have improved further. So that's a good sign," he added.

with inputs from PTI

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