FDI, portfolio flows remain strong, India assures Fitch

Fitch execs arrive a day after rupee plunged to record low S&P had downgraded India to -ve in April

The government today pitched for a rating upgrade by the global agency Fitch saying it is committed to keep subsidies within 2% of the Gross Domestic Product (GDP) and contain fiscal deficit.

"We said we are committed to capping subsidy at 2%...We pitched for a rating upgrade," said a Finance Ministry official after a meeting with the representatives of Fitch here.

Fitch had last year affirmed BBB- rating for India, indicating moderate degree of safety regarding timely servicing of financial obligations. Finance Ministry officials had earlier held similar meetings with representatives of other credit rating agencies— Moody's and Standard and Poor's.     

Much to the discomfort of the government, Standard and Poor's last month lowered India's rating outlook to negative from stable, while retaining the rating at BBB.

Finance Minister Pranab Mukherjee yesterday said in the Rajya Sabha that the government would launch austerity measures to deal with the tight fiscal situation and would try to keep subsidies on oil, fertiliser and food within 2% of the GDP.