The finance ministry said on Friday it will try to convince rating agencies on India's commitment to fiscal consolidation, within hours of Fitch Ratings 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.
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 fiscal 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 fiscal consolidation path.
The 3.3 per cent fiscal deficit projected for the next fiscal is reduction in spending and not expansion, he added.
Garg said a convincing path has been laid down in the Budget by amending the Fiscal 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.
Finance Minister Arun Jaitley had in his Budget speech projected a higher fiscal 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.