Amid signs of a turnaround in the economy that has slumped to a decade-low growth in 2012-13, the government on Tuesday told the US credit rating agency Moody’s that the country’s growth story is credible and government is taking steps to deal with the fiscal issues."It’s not as if the picture is fully rosy... All we have said is that we know there are problems but we have to take actions in a particular manner and the government is fully committed to take action so that the problem that we are seeing today are fully addressed," economic affairs secretary Arvind Mayaram said after meeting representatives from Moody’s.
Last week, Moody’s had said India’s sovereign outlook is stable and does not warrant any action on the country’s credit rating in the next 12-18 months.
“We have a credible story that we have told them and they have appreciated what we have said. Now rest is up to them,” Mayaram said.
Last year, the 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.
India’s gross domestic product (GDP) is set to grow at 6.4% in 2013-14, according to the Prime Minister’s Economic Advisory Council’s (PMEAC’s) latest projection. The Reserve Bank of India (RBI), which has forecast that India’s GDP would grow by 5.7% in the current fiscal, however, has warned that growth would impinge upon quality of governance and the speed at which structural reforms were carried out.
The government has maintained that India has taken bold and tough decisions such as reducing subsidies on petroleum products and attempts to rein in the fiscal deficit — a measure of the amount of money that the government has to borrow to fund its current expenses.
“The last time we had met (Moody’s) they (the numbers) have improved further. So that’s a good sign,” Mayaram said.