Global credit rating agency Standard and Poor's (S&P) has ruled out an immediate upgrade in India's sovereign ratings despite the government's strong pitch amid early signs of an economic turnaround backed by reform measures to spur investment and enforce fiscal discipline.
"A rating upgrade at this point is not on the cards," said Elena Okorochenko, managing director, sovereign and international public finance ratings, Asia Pacific, S&P, at a session during the Asian Development Bank's (ADB) annual session on Saturday.
A promotion in India's outlook from "negative" to "stable," however, appeared probable, she said. "If you think the rating is on negative outlook, it is highly improbable that an upgrade follows from a negative outlook. Usually, the outcome from a negative outlook is downgrade or stable outlook."
Last year, three US credit rating agencies -S&P, Moody's and Fitch - were unsparing in their criticism over India's macro-economic fundamentals and precarious public finances.
A ratings upgrade from the current "BBB-" can potentially improve India's attractiveness as a global business hotspot and investment destination. A rating of "BBB-" is one notch above "junk," which carries a higher risk of default by the government on its loans.
In October, S&P had warned that India still faces a "one in three" chance of a downgrade.
Last week, India made a strong pitch for an upgrade of its credit ratings in its consultations with S&P representatives."
"I think there is a case for an upgrade because this country has shown its determination to put the economy back on track," Arvind Mayaram, economic affairs secretary, had said on April 25, after the meeting.