"We pitched for a rating upgrade. We told them look at the FDI inflows, look at the returns in the market. We said we are committed to capping subsidy at 2 per cent," said a Finance Ministry official after a meeting with the representatives of Fitch here.
Fitch had last rated India in 2010, giving India's foreign and local currency rating at 'BBB-/stable'. Last year, the agency had affirmed the 'BBB-' rating for India indicating moderate degree of safety regarding timely servicing of financial obligations.
The representatives of the US-based credit rating agency would meet the officials of the Finance Ministry again tomorrow and Fitch is likely to come out with its assessment within a month.
The official said that with FDI inflow at its highest and FIIs pumping money into Indian markets, the country is an able candidate for a ratings upgrade. Since 2011, Fitch has downgraded all major economies in the world.
Asked if Fitch raised concerns over the burgeoning Current account Deficit (CAD), which arises when import of goods and services exceeds a country's exports, the official said that with high inflow of foreign funds CAD is expected to be high.
"When you have this kind of inflow, a high CAD is normal," he said. CAD had touched 4 per cent of GDP at the end of December 2011.
The Foreign Direct Investment (FDI) into India in the last fiscal was around USD 36.50 billion (around Rs 1.82 lakh crore). Besides, FIIs have put in around USD 12 billion into the Indian markets in the last two months. MORE
