India on Tuesday made a case with American credit rating agency Fitch for a sovereign ratings upgrade based on improvement in the country's macroeconomic conditions and the outlook for the coming year.
"We highlighted the overall economic situation and in all the major sectors the challenges which the economy faces and what is the outlook for the next year," Economic Affairs Secretary Shaktikanta Das told reporters here after a meeting with Fitch representatives.
Fitch Ratings primary analyst Thomas Rookmaaker said: "We are now in the process of our review. It is going to take some time."
In December, Fitch retained India's sovereign rating at the lowest investment grade of "BBB-/stable", saying the country would continue to post good growth despite subdued prospect for the Asia Pacific region.
"India and Vietnam have favourable macroeconomic prospects, partly reflecting lower exposure to some of the negative pressures affecting the region. However, weaknesses in their public finances have deterred us from taking positive ratings action," Fitch said in a report titled "Emerging Asia Sovereign Outlook 2016".
'BBB-' is the lowest investment grade that is only a level above junk grading.
The agency said a "BBB-" rating, along with a stable outlook, a strong medium-term growth prospect and favourable external finances, will balance out with high government debt, weak structurals and a difficult but improving business environment.
Official data last month showed India was one of the world's fastest growing economies in the March quarter, with GDP growing at a rate of 7.9 per cent. The economy expanded 7.6 per cent in the entire fiscal 2015-16.
At the meeting with Fitch executives, finance ministry officials also highlighted the reform initiatives of the government which include the new bankruptcy code, creation of monetary policy committee for the Reserve Bank and amendments to the Debt Recovery Tribunal (DRT) and Sarfesi Acts.
The ministry also told Fitch representatives about the government's commitment to early implementation of the pan-India Goods and Services Tax (GST), the Bill for which is currently stalled in the Rajya Sabha where the ruling NDA currently lacks majority.
With industrial recovery not yet on the horizon and despite forecasts of good rains in the monsoon season, India Ratings of the Fitch Group has recently lowered its growth forecast for the country to 7.7 per cent from 7.9 per cent.
--IANS
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