After a successful exercise last year in convincing Moody’s Investors Service to improve India’s sovereign ratings, the finance ministry is set to repeat the process with another global rating agency, Standard and Poor’s (S&P).
A senior ministry official told Business Standard the S&P team was slated to visit them on Tuesday, with presentations and meetings with individual departments to run into Wednesday. The main two-hour inaugural meeting with the rating agency would be chaired by economic affairs secretary R Gopalan.
“This will be followed by smaller explanatory meetings with officials from various departments, including infrastructure, capital markets, revenue and disinvestment, running into Wednesday,” he added. The exercise would be broadly similar to what was done when Moody’s team came last year.
With the budget for 2012-13 already having presented the data, perspective on the existing situation and reform measures would be explained, he stressed. “Personal interaction of this kind helps. If they have certain issues, these would be explained,” said the official.
S&P had announced its India ratings in April last year and finance ministry officials expect the new ratings to be declared this month or in May. The current rating to India’s long-term debt by S&P is BBB- with a stable outlook.
A visiting team returns to present its assessment to their agency’s rating committee, after which the assessment is done, explained the official. There is, largely, agreement with the views of the team which had visited a particular country.
After a similar meeting with finance ministry officials led by Gopalan in November 2011, Moody’s had upgraded its rating on both, long-term government bonds denominated in the domestic currency and the long-term country ceiling on foreign currency bank deposits, from Ba1 to Baa3 - speculative to investment grade. It also upgraded short-term government bonds denominated in the domestic currency from NP to P-3, again from speculative to investment grade.
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The ministry, under a strategy for presenting the growth story and seeking better ratings, had provided Moody’s a detailed, data-based ‘India factsheet’, wealth in public sector undertakings, and a cross-country comparison of long-term economic, fiscal and financial indicators.
The official said the government would seek similar upgrades from other rating agencies and try for improvement in Moody’s ratings.