The Government of India has intensified its structured and interactive engagement with major international credit rating agencies—S&P, Moody’s, Fitch, and Morningstar DBRS. According to Minister of State for Finance Pankaj Chaudhary’s response in the Rajya Sabha, this initiative is part of a strategic effort to highlight India’s robust macroeconomic fundamentals and enhance its sovereign credit rating profile The Economic Times+5Business Standard+5KNN India+5.
Key Initiatives and Areas Emphasized
- Structured Dialogues: Officials presented a detailed macroeconomic outlook—including steady GDP growth, controlled inflation, fiscal consolidation, strong forex reserves, resilient banking systems, and significant infrastructure development—to these agencies KNN India+4Business Standard+4The Economic Times+4.
- Rating Status:
- Moody’s: Baa3 (stable outlook)
- S&P and Fitch: BBB– (respectively, positive and stable outlooks)
- Morningstar DBRS: Upgraded to BBB (stable trend) in May The Economic Times+4Business Standard+4KNN India+4
- Macro Themes: Government emphasis includes capital expenditure, financial-sector reforms, digital infrastructure enhancement, and better ease-of-doing-business measures The Economic Times+6Business Standard+6Rediff+6.
- Rating Methodologies: Chaudhary noted that agencies assess sovereign risk using categories such as economic strength; fiscal flexibility; monetary performance and resilience; external resilience; and institutional framework mobilizingdevfinance.org+5Business Standard+5mint+5.
Why It Matters
- Investor Confidence: Proactive engagement helps shape agency perceptions, supporting more favorable sovereign ratings and potentially reducing borrowing costs.
- Macro Resilience: Maintaining investment-grade ratings is crucial, especially amidst global economic uncertainties and volatile financial conditions.
Source (full link):
https://www.business-standard.com/finance/news/govt-ups-engagement-with-rating-agencies-to-show-economic-strength-finmin-125072200693_1.html
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