S&P assessment of India's debt profile is reasonable: Economic Affairs Secretary

Secretary of the Department of Economic Affairs (DEA) Subhash Chandra Garg on Friday termed Standard & Poor's (S&P) rating of India's debt profile as "reasonable", adding that the report was "cautious" this year.

"From the ratings, it looks like S&P is fairly convinced with the economy. While both S&P and Moody's considered investment grading as the crux of the rating, the latter's report was more favourable. We hope that S&P in its next report will be more favourable than cautious," he said while addressing a press conference here today.

Further, he said while Ease of Doing Business and other economic reforms can be a positive influence on the ratings, they cannot be a primary influencer. Garg also claimed that the second quarter results which are expected at the end of the month will witness growth compared to that of the first quarter.

"One of the main problems is the debt to GDP ratio. However, over the years, it has been kept under control by reducing fiscal deficit. Our medium and long term plans are clear. We provide the two agencies information as and when required," said Garg.

Earlier, financial services company S&P Global Ratings retained its outlook on India as stable, and kept the rating unchanged at BBB-.

While the agency retained its rating on India, it also lauded the Modi-led government's fiscal consolidation drive under which multiple reforms have been undertaken towards the path of a favourable economy.

The report noted that despite two quarters of weaker-than expected growth, India's economy will grow robustly in 2018-20, and foreign exchange reserves will continue to rise. F

Further, it stated that over the next two years, growth will remain strong; India will maintain its sound external accounts position and fiscal deficits will remain broadly in line with the expectations.