India's disappointment for the 12th consecutive year, Fitch did not raise India's rating

'BBB minus' is the last rating in terms of investment. After this, if the rating falls, the risk for foreign investors increases and they do not hesitate to invest.

- - - - - - - - - Advertisement - - - - - - - - -

New Delhi: International rating agency Fitch has retained India's rating on 'BBB Minus'. Also, the view to look forward to this rating is kept constant. This is the 12th consecutive year when Fitch did not make any change in India's rating, though the government was constantly trying to improve it?

'BBB minus' is the last rating in terms of investment. After this, if the rating falls, the risk for foreign investors increases and they do not hesitate to invest. While Fitch did not make any changes in the rating, the second rating agency Moody's had made India's rating up one notch after 14 years. Another rating agency Standard and Purse did not make any changes to India's rating.

A major reason for Fitch's retaining the rating at the present level is the health of the public exchequer. When presenting the general budget for the financial year 2018-19, Finance Minister Arun Jaitley talked about the increase of government treasury i.e. the target of fiscal deficit, to increase 30 basis points (100 basis points, one per cent). According to this, where the target of deficit has been increased from 3.2 percent to 3.5 percent for 2017-18, the target for 2018-19 has been set at 3.3 percent instead of 3 percent. By the way, the government referred to the goods and services tax, which means 8 months of earnings instead of the whole year, from GST, but it seems that the rating agency does not bother about the increase in the target.

The rating agency has pointed to some other deficiencies in its assessment. For instance, in the case of the World Bank governance indicator, India's position is weak. Not only this, India is behind the United Nations Human Development Index. This is proof that the country is still behind the basic scale of human development.

Well Fitch has said many good things. For instance, the agency's attitude towards development is to excite. However, during the business year ending March 31, 2017-18, India's growth rate was projected to decline from 7.1 per cent to 6.6 per cent, but the agency feels that this is 7.3 per cent in the current business year and 7.5 per cent in the next business year. Will be closer to The special thing is that the average growth rate of five years is 7.1 percent, which is the highest among all other BBB ratings.

The agency has praised the Reserve Bank for keeping inflation in line with the target. According to the agency, the central bank has followed strong monetary policy. Keep in mind that by the way, the retail inflation is intended to be between two to six per cent, but generally the target is four per cent. The agency feels that the average retail inflation in the current business year can be 4.9 per cent.