Ratings agency Standard & Poor’s does not expect an upgrade to India’s sovereign debt rating in the next year in the absence of substantial, quality reforms, it said on Monday, days after the government’s budget slowed the pace of fiscal consolidation.
India needs to at least strengthen two of its macroeconomic metrics on growth, inflation and fiscal health, said Kim Eng Tan, Senior Director, Asia-Pacific Sovereign Ratings for Standard & Poor’s.
“However, again, (a) very big improvement is unlikely to come through in next year or so… We don’t see the rating going up in the next year or so,” Tan said.
S&P currently rates India at “BBB-minus”, its lowest investment grade rating, with a “Stable” outlook.
The ratings agency said the quality of fiscal consolidation was not as good as it could have been on structural front, after Indian finance minister Arun Jaitley pushed back by a year, to 2017/18, a deadline for cutting the fiscal deficit to 3 percent of gross domestic product (GDP).