India makes the case with Fitch for ratings upgrade

India on Thursday made the case with global agency Fitch for a rating upgrade, saying that recent reform measures have improved the country's growth prospects and its fiscal consolidation programme remains on track.

"India is on the path of fiscal consolidation and budget paved way for increased investment. We have made a case for ratings upgrade. There is no reason why rating agencies should not look at upgrading India," a finance ministry official told reporters here after an officials' meeting with Fitch representatives.

"GDP growth prospects are expected to improve due to four factors - declining oil prices, cumulative effect of reforms, lower interest rates and better monsoon forecast. India's compulsion to reduce fiscal deficit has somewhat lessened," the official added.

He said that with the Centre and the states following a credible fiscal consolidation roadmap, achieving the 3.9 percent fiscal deficit target for 2015-16 was feasible.

Besides, the current account deficit (CAD), which is the net outflow of foreign exchange over inflows, is expected to remain within manageable levels.

India's current account deficit came down to $8.2 billion -- or 1.6 percent of the gross domestic product -- in the third quarter ended December 2014, compared to $10.1 billion, or 2 percent of GDP, in the previous quarter, it was announced on Tuesday.

The CAD had reached $4.2 billion, or 0.9 percent of the GDP in the corresponding period in the previous year, the Reserve Bank said.

Presenting his first full budget for 2015-16 last month, Finance Minister Arun Jaitley postponed the target deadline for controlling fiscal deficit to three percent, reasoning that insistence on a timetable to contain the deficit would harm growth prospects.

The targets for the next three years have been set at 3.9 percent for 2015-16, 3.5 percent for 2016-17, and 3.0 percent for 2017-18.

International rating agencies Fitch, S&P and Moody's have assigned the lowest investment grade rating to India, but with a stable outlook.