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Will try to convince rating agencies on fiscal consolidation: Fin Min

In an interview to PTI, the secretary said another leading global agency Moody's had upgraded India's sovereign ratings last year

Press Trust of India  |  New Delhi 

Economic Affairs Secretary SUBHASH GARG
Subhash Garg, Economic Affairs Secretary

The ministry said on Friday it will try to convince rating agencies on India's commitment to consolidation, within hours of saying that high debt burden constrains the country's rating upgrade. Fitch's comments added to the woes of the stock market already reeling under the government's decision to impose 10 per cent long term capital gains tax on equities. The 30-share Sensex plummeted 840 points -- its biggest single-day slump since August 24, 2015 -- while the broader NSE Nifty tanked over 250 points to finish below the 10,800- mark. "No question of losing hope," replied when asked if the government has lost hope of sovereign rating upgrade in wake of Fitch's comment. In an interview to PTI, the secretary said another leading global agency Moody's had upgraded India's sovereign ratings last year. Moody's on Thursday said the deficit projection of 3.3 per cent for FY19 is in line with its forecast and the target will be achieved. "So I don't expect any downgrade and any outlook change," the secretary said. Garg said the government would try to convince Fitch and another agency Standard & Poor's on its commitment to stick to the consolidation path. The 3.3 per cent deficit projected for the next is reduction in spending and not expansion, he added. Garg said a convincing path has been laid down in the Budget by amending the Responsibility and Budget Management (FRBM) Act. "I think those should convince rating agencies...ours is a convincing story to tell.

I hope they get convinced," he said. Minister had in his Budget speech projected a higher deficit of 3.5 per cent of the GDP for 2017-18, as against the target of 3.2 per cent, on account of GST implementation and deferment of spectrum auction.

First Published: Fri, February 02 2018. 21:50 IST
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