FinMin: Case exists for ratings upgrade

Ministry pushes for a notch or two,will convey view to global agencies during their visit in April

The finance ministry feels there is a case for a rating upgrade of India by at least a notch or so and agencies like Standard amp; Poors Samp;P and Fitch would be conveyed this view when they visit India nexta month.

I strongly believe there is a case for Samp;P and Fitch to upgrade. Even if it is one only notch or two notch above,but certainly there is no case for a downgrade, said Arvind Mayaram,secretary,department of economic affairs. He said the two agencies are scheduled to visit next month when the finance ministry will present the state of the economy to them and highlight the steps that the government has taken to contain fiscal deficit.

We are going to have discussion with rating agencies sometime in April. Fitch and Samp;P will come, Mayaram said. Moodys will also come,but no time has been fixed yet, he added.

Both Samp;P and Fitch had earlier threatened to downgrade Indias credit rating as an aftermath of the expansionary policy which led to a rising fiscal deficit. The fiscal deficit had touched a high of 5.8 per cent in 2011-12.

The government in the recent months has taken a host of reform initiatives,including liberalising foreign investment norms,partial decontrol of diesel and capping of subsidised LPG cylinders,with a bid to check the rising subsidy bill.

Besides,with a cut in expenditure it has been able to restrict the fiscal deficit for the current financial year at 5.2 per cent.The government aims to contain deficit at 4.8 per cent in 2013-14 and bring it down to 3 per cent by 2016-17.

After the presentation of the Union Budget,Samp;P and Fitch had said Indias sovereign rating is unaffected but had warned that policy execution and controlling subsidies would be the key risks to look out for during the year.

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With elections due in a little more than a year,the adherence to fiscal consolidation remains encouraging, Fitch had said,even as Samp;P termed it as prudent. Besides,Moodys had termed the Budget as credit positive.

Samp;P currently rates India as BBB-,lowest in the investment grade. Any further downgrade will push Indias rating to junk status,making it difficult and costlier for Indian entities to borrow funds overseas.

FinMin sees Rs 50,000 crore worth projects going on stream in FY14

Foreign investment in India would get a boost once the new Cabinet Committee on Investment CCI starts clearing projects to the tune of Rs 50,000 crore in the next fiscal year,a top finance ministry official said.

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The clearances will also give an impetus to the infrastructure projects,said Arvind Mayaram,secretary,department of economic affairs.

We would see many projects coming on stream in the next fiscal. CCI approvals would be for total investments of about Rs 50,000 crore by March-end, he said.

The government has constituted a CCI,under Prime Minister Manmohan Singh,to accord fast track clearances to high-end projects for their time-bound implementation.

Once the approval process is streamlined and the approval process is hassle free,then much more FDI is likely to flow into the country, he said.

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Mayaram added ministries have now have started taking quicker decisions and are acting to clear projects faster.

The CCI has met twice so far to and discussed clearances to projects in coal,power and oil and gas sectors.

The government has been taking steps to streamline investment and finance minister P Chidambaram has also been engaging with investors to attract overseas investment.