India makes a rating upgrade pitch with Moody’s

India on Friday made a strong pitch for a sovereign rating upgrade with Moody’s, highlighting the government’s assessment of the economy, sources said on Friday. Ahead of its annual review of the sovereign rating, Moody’s Investors Service representatives met Indian government officials. A higher rating for India would mean the nation is less risky, translating into lower interest rates on borrowings. ”Moody’s acknowledged the positives of the Indian economy. We are hopeful for a rating upgrade from Moody’s,” an official said after the meeting. Moody’s Investors Service has a ‘Baa3’ sovereign credit rating on India, with a stable outlook. ‘Baa3’ is the lowest investment grade rating. Officials also highlighted India’s ongoing economic reforms, government thrust on infrastructure development and forex reserves nearing USD 600 billion. Officials from all economy-related ministries and Niti Aayog attended the meeting. The Finance Ministry sources said the meeting happens every year. During the meeting, the officials explained the government’s assessment of the economy to help these credit agencies make their assessments, the sources added. Moody’s representatives discussed the government’s disinvestment roadmap and officials highlighted that disinvestment should be seen from the prism of reform and not just revenue generation exercise. In June 2020, Moody’s downgraded India’s rating to ‘Baa3’ from ‘Baa2’ with a negative outlook, citing a weak reform push and slow growth. In October 2021, the outlook on the rating was revised to stable. The government had largely met its fiscal objectives over the past two years. The fiscal deficit, which is the difference between government expenditure and revenue, narrowed to 6.4 per cent of GDP in 2022-23 fiscal, from 6.7 per cent of GDP in the 2021-22 fiscal. In the current fiscal, the deficit is budgeted at 5.9 per cent of GDP. As per the fiscal consolidation roadmap, the government intends to bring down the fiscal deficit below