They did so at the finance ministry presentation on Monday of its case for a rating upgrade. Moody’s has India at the lowest investment category at present.
The ministry sought to allay the rating agency’s concerns and said economic growth was on an upward swing.
“They (Moody’s) have concerns about the fiscal deficit. We explained that we will be able to maintain the target,” Finance Secretary Arvind Mayaram told reporters after the meeting.
The Centre’s fiscal deficit is projected to come down to 4.1 per cent of gross domestic product in the current financial year against 4.6 per cent in the previous one.
The deficit was over 10 per cent of GDP in the first quarter, over 60 per cent of the year’s budget estimate in only four months.
However, the government is confident that as the year progresses, more revenue will be collected, bringing down the deficit.
Moody’s has repeatedly stated it is more concerned about the medium-term plan for the fiscal deficit and not only this year’s target.
The finance ministry has already committed to reining in the fiscal deficit at three per cent of GDP by 2016-17.
Mayaram said the government had set up an Expenditure Management Commission, which would look at broad contours of subsidy rationalisation.
Headed by former Reserve Bank governor Bimal Jalan, the Commission is required to given an interim report before the Budget for 2015-16 and the final report in early 2016.
Moody’s has assigned a “Baa3” rating on India, the lowest investment grade.
The rating has a stable outlook. Moody's did not respond to a query on whether it would upgrade India’s rating or outlook or retain these.
“We presented our case. The growth is coming back. The budget has strong growth impulses and the response of the economy is positive,” said Mayaram.
He further said revenue buoyancy was good and the International
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