India on Tuesday pitched for a higher sovereign rating before the US agency Moody's, citing good growth prospects and economic reforms as the strengths of its economy.
The government emphasised that the country's credit strengths were 'much better' than most similar-rated economies.
The finance ministry, in a presentation to the credit rating agency, highlighted that the latest global Competitiveness Report 2011-12 issued by the World Economic Forum indicated that India's sovereign rating was at par with 'Baa1' category countries, two notches above its current rating given by Moody's.
It said the Indian economy has shown continued growth, resilience in the face of economic crisis, and a commitment to reforms during the last seven years -- and that should be factored in Moody's calculations.
At present, Moody's government bond ratings for foreign currency debt and domestic currency debt of India are 'Baa3' with a stable outlook and 'Ba1' with a positive outlook, respectively.
The last upgrade on the foreign currency debt was done by Moody's in 2004.
Moody's judges obligations rated 'Baa' to be 'moderate credit risk' and 'Ba' to have 'questionable credit quality'.
"The government encouraged the Moody's team to take a fresh look at the long-term credit strengths of the Indian economy and consider a long due credit rating upgrade for India's sovereign debt," a finance ministry official said after the meeting with Moody's, chaired by Economic Affairs Secretary R Gopalan.
The finance ministry argued India had good long-term growth prospects arising from high savings and investment ratios, favourable demographics, growing middle-class income, rapid progress in infrastructure, and a stable democratic polity backed by strong constitutional institutions.
It said the government was actively working towards structural reforms in the economy.
This year, it had undertaken several policy measures, including bold fuel price hikes, a proposal to allow 51 per cent foreign direct investment in multi-brand retail and draft land acquisition bill.
Recently, Moody's had had lowered the outlook on the Indian banking sector to negative from stable, saying that slow global economic growth could impact profitability.
Apart from Moody's, India's sovereign debt is rated by another five international agencies, which include Standard & Poor's, DBRS, Fitch Ratings, Japanese Credit Rating agency, and Rating and Investment Information.
In June this year, Canada-based DBRS had for the first time upgraded India's long-term foreign and local currency debt ratings from BBB (low) Negative to Stable outlook.
Earlier, Fitch had affirmed the credit ratings issued in June 2010 at BBB negative with stable outlook for long term foreign and local currency.
It kept short-term foreign currency rating at 'F3' and the country ceiling at BBB negative, saying India's robust growth prospects and solid external financial position underpin its BBB negative sovereign status.
