As the economy shows some signs of a revival, officials from international ratings agency Moody’s are set to visit India this week for a review of the sovereign rating. “The visit is part of their annual review. But now with some definite signs of improvement in the economy, we will be pushing for an upgrade,” said a senior official close to the development. Senior executives from Moody’s will be meeting finance ministry officials including finance secretary Arvind Mayaram on Monday to review the economy. Similar meetings have also been held with officials from ratings agency Standard and Poor’s last month. But the finance ministry is now of the view that there is a clear case for a ratings upgrade as the economy is on a much more stable footing compared to the previous fiscal. Currently, India is rated as “Baa3” — the lowest investment-grade rating — with a “stable” outlook by Moody’s. “Latest data on GDP growth is positive and problems of current account deficit, that were seen as a problem for investors have also been solved,” the official said, adding that the fiscal deficit target of 4.1 per cent too will be achieved. While the economy grew at its fastest pace in two years as 5.7 per cent in the first quarter of the fiscal, the current account deficit too narrowed to 1.7 per cent of the GDP in the same period. However, the global rating agency has remained cautious warning that the country’s fiscal deficit and inflation outlook could prevent a ratings upgrade this fiscal. “While stronger growth in this large and diverse economy will help to counterbalance these credit challenges, they limit further upward momentum in the sovereign rating,” Moody’s had said in a statement last week, referring to the country’s fiscal deficit and high inflation. India’s fiscal deficit touched 61.2 per cent ·of its full fisc target between April and July raising concerns over the Centre’s fiscal health. But the finance ministry is optimistic that the deficit will be under control through big ticket stake sales in disinvestment and a buoyancy in tax revenues.
