We have had a negative view since last July. The fiscal outlook is getting worse and our recent report reiterated our views and worries about fiscal sustainability.
We are looking for two things. One, what the next government has in mind in terms of the budget to get some indication on whether India will return to a more sustainable fiscal position. I suspect not, because the focus will be on supporting growth.
Two, we are waiting for what the thirteenth finance commission, which is due to submit its report around October, has to say. We are looking forward to the recommendations, which need to be very robust, to get a picture on the medium-term fiscal outlook.
Meanwhile, the economy will continue to weaken and fiscal position will look dire. We are not looking at a further change in outlook or a downgrade. What we are interested in is finding out whether the deterioration is cyclical or if there are some fundamental problems with the public finance.
- James McCormack,
Head of Asia Sovereign Ratings, Fitch
(As told to Business Standard)
