Zee Media Bureau

Global rating agency Standard & Poor's (S&P) has upgraded India's credit outlook to stable from negative.

S&P said we could raise the outlook rating if the economy reverts to a real per capita GDP trend growth of 5.5 percent per year.

The rating agency further said that CAD has improved in recent months post gold import curbs.

Representatives of Standard & Poor’s had met Finance Ministry officials on August 12. They had informed S&P about the government’s road map to reduce fiscal deficit to 3 percent of GDP by 2016—17.

As regards the current fiscal, the government proposes to bring down the fiscal deficit to 4.1 percent of the GDP from 4.5 percent a year ago.

S&P currently rates India as ‘BBB—’, the lowest in the investment grade, with a negative outlook.

Moody’s has assigned ‘Baa3’ rating on India, with a stable outlook.

Pitching for the country’s rating upgrade, Finance Ministry officials had earlier informed credit ratings agency that the Budget 2014—15 has provided an impetus to growth and the government is taking steps to keep the fiscal deficit under check.

The government has set up an Expenditure Management Commission which would look at broad contours of subsidy rationalisation.

Headed by former Reserve Bank Governor Bimal Jalan, the Commission is required to submit its interim report before the Budget for 2015—16 and final report in early 2016.

Improved performance of mining, manufacturing and services sector has pushed India’s economic growth rate to two—and—half years high of 5.7 percent in the April—June quarter, a development which the Finance Ministry expects to continue for rest of the fiscal.

With agency inputs