S&P rules out India upgrade for next 2 yrs, govt hits back

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Global ratings agency Standard & Poor’s (S&P) on Wednesday reiterated its sovereign rating and outlook on India but ruled out any upgrade for this year and the next, citing weak public finances. The government slammed S&P’s statement saying there was a ‘disconnect’ between rating agencies’ views and investor perception on India.

The US-based ratings agency maintained the lowest investment grade rating of ‘BBB-‘ with a ‘stable’ outlook for India citing the country’s sound external profile and improved monetary credibility. While it advocated more efforts to lower government debt to below 60 per cent of the GDP, it did not expect revenues to raise enough to meaningfully lower the deficit over the medium term.

 “The stable outlook balances India’s sound external position and inclusive policy-making tradition against the vulnerabilities stemming from its low per-capita income and weak public finances,” S&P said in a report to its clients. “The outlook indicates that we do not expect to change our rating on India this year or next, based on our current set of forecasts.”
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