While the government and the country is rejoicing the increase in India’s sovereign ratings by Moody’s, global rating agency Standard and Poor (S&P) is all set to give its review on the economy on 24 November, as reported by The Indian Express.
“The S&P is coming out with its review, we are bracing for both a positive and a negative outcome of their assessment,” a senior finance ministry official told The Indian Express.
However, there are concerns regarding India’s fiscal points and lowering Goods and Services Tax rate on a number of commodities and the recent reduction in excise duty on fuels.
In October, S&P kept India’s sovereign rating at the lowest investment grade with a stable outlook. According to Firstpost, S&P in November 2016 had ruled out an upgrade for India in 2017 and 2018.
The announcement had drawn a strong criticism from the government which asked the US-based agency to introspect a disconnect between its thinking and investors' perception.
The agency had maintained it wanted to see more efforts to lower government debt to below 60 percent of GDP. It also said that it did not expect revenues to rise enough to meaningfully lower the deficit over the medium term.
An upgrade in the ratings from S&P will likely reduce interest costs for government and companies using international funds. Last week, Moody’s upgraded India’s sovereign ratings from its lowest investment grade Baa3 to Baa2 citing India’s positive economic reforms.
(With inputs from The Indian Express and Firstpost)
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