)
Riding on 'bold and tough' decisions, India today made a case for upgrade of its ratings by Standard & Poor's from the current lowest investment grade, instead of a downgrade as warned by S&P along with Fitch Ratings.
Economic Affairs Secretary Arvind Mayaram said there was no case of a rating downgraded as the government has taken bold and tough decisions, like reducing subsidies on petroleum products.
"I think there is a case for an upgrade because we have taken the kind of decisions that most of countries in the world have not been able to take. This country has shown its determination to put the economy back on track. We believe it will happen and there is no doubt about it," he told reporters after meeting S&P officials.
Mayaram said 36% of total subsidies globally on petroleum products is given by developed countries, while India has started phasing out such subsidies.
He said the S&P representatives were informed that government resolved to check fiscal deficit and speed up mega projects, including clearance by the Cabinet Committee on Investments (CCI). CCI has cleared projects worth billions of dollars in the recent weeks.
"We have spoken to them convincingly. We have shown that the reforms is on track," he added.
Similar meeting has taken place with Fitch on April 12. Earlier, S&P and Fitch had threatened to downgrade India's credit rating.
After the presentation of Union Budget, the two had said India's 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.
S&P currently rates India as 'BBB-', lowest in the investment grade, with a negative outlook.
Fitch has also assigned India the lowest grade in investment category with a negative outlook. Moody's too has given India the lowest rating in investment grade but not with negative outlook. Any lowering of rating by these agencies will pull down India's sovereign rating to junk, which would make India a risky country for investment.
Referring to the food security proposal, the Secretary said "we are very confident that we are on the right track".
India's economic growth, which slumped to a decade low of 5% in last fiscal, is pegged at 6.4% in 2013-14.
On investments, Mayaram also said that there is an uptick since October on capital goods.
"It is in anticipation of investments happening. Similarly, we believe the Rs 70,000 crore worth of projects which have been approved... The investments will begin to happen now," he added. In the recent months, government has undertaken several reforms initiative like liberalising FDI norms for various sectors, including opening up of multi-brand retail, to promote growth and investment.
The government also undertook partial decontrol of diesel and capped subsidised LPG cylinders, in a bid to check the rising subsidy bill.
