New Delhi: India today told global rating agency Moody’s that it deserves higher rating, at least two notches above the present grade, on the back of improvement in basic economic parameters witnessed in the last few years.
“Moody’s should take a fresh look at the long-term credit strengths of the Indian economy and consider a long due credit rating upgrade for India’s sovereign rating,” a Finance Ministry official said after a meeting with Moody’s representatives here today.
The officials, led by Department of Economic Affairs Secretary R Gopalan, impressed upon Moody’s to upgrade India’s rating to Baa1, two notches above its current rating. Moody’s had last upgraded India’s rating to ‘Baa3′ (with stable outlook) in 2004. Baa3 means medium grade with moderate credit risk.
Besides, Moody’s had assigned a ‘Ba1′ with a positive outlook rating to India’s local debt.
India’s long-term growth prospects arise from a high savings and investment ratio, favourable demographics, rapid progress in infrastructure development and a stable democratic polity, the official said.
“India has low external debt to GDP ratio, high foreign exchange reserves, deep domestic capital markets and diversified domestic holdings of sovereign debt. It outperforms its ‘Baa’ peers on these indicators,” he added.
Last week, the rating firm had lowered the outlook on the Indian banking sector to negative from stable saying that slow global economic growth could impact profitability.
The move did not go down well with the government and the bankers who termed the move as unwarranted and said the Indian banks are better off than their global peers.