Standard & Poor's says evaluation of Modi govt's policies under way
PTI August 18, 2014
Global rating agency Standard & Poor's (S&P) has said it is evaluating policies of the Narendra Modi-led Bharatiya Janata Party government for a review of India's sovereign rating.
S&P currently rates India as 'BBB', the lowest in the investment grade, with a negative outlook.
"... we are evaluating the new government's policies and are forming a view on the likelihood of their success," S&P analyst Agost Benard told PTI when asked if the agency is contemplating a review of the country's sovereign rating.
"Any rating implications or possible changes to the outlook on the rating will be communicated to the market and the media through the usual channels," Benard said in the e-mail reply.
In order to promote growth and investment, Finance Minister Arun Jaitley in his Budget 2014-15 had announced a host of measures to accelerate economic growth. These included allowing greater foreign direct investment in insurance and defence, increasing spending on infrastructure, and introducing tax incentives for savings and investment.
S&P representatives had recently held extensive discussions with finance ministry officials. The agency refused to share the details saying it is confidential.
The finance ministry officials had impressed upon the agency the government's resolve to push economic reforms, promote growth and contain fiscal deficit at 4.1 per cent in 2014-15, sources said. They are reported to have informed S&P about the government's road map to reduce fiscal deficit to three per cent by 2016-17.