SME Times is powered by   
Search News
Just in:   • Sanjeev Kapoor Honored the Field of Food and Hospitality  • Hotel Sangeetha, Chennai, Issues a Clarification on Food Pricing  • 'India can become second largest market for robotic surgery'  • Firefox Organises EverydayAbility Paramotoring Event  • Equities close marginally in the green; IT, banks cap gains 
Last updated: 03 May, 2017  

fitchTHMB.jpg Fitch keeps India's rating unchanged at 'BBB-'

india-ratings.jpg
   Top Stories
» NSE's IISL launches SME Emerge index
» GST still have some teething troubles: EPCES
» Corporate hiring to be slow till fiscal-end: ASSOCHAM
» GES to create congenial ecosystem for startups: NITI Aayog CEO
» Aadi Mahotsav to promote Tribal Economy: Minister
SME Times News Bureau | 03 May, 2017
Fitch Ratings on Tuesday maintained India's rating at 'BBB-' on a "still-weak business environment" despite the Centre's pitch for an upgrade on its structural reforms agenda.

Fitch affirmed India's long-term foreign and local currency ratings at 'BBB-', the lowest investment grade.

The government, in its earlier meetings with Fitch Ratings officials, has been reportedly pitching for a rating upgrade on improved macroeconomic indicators and fiscal consolidation.

"The impact of the reforms programme on investment and real Gross Domestic Product growth will depend on how it is implemented and the extent to which the government continues its strong drive to improve the still-weak business environment," Fitch Ratings said here in a statement.

"India's sovereign ratings balance a strong medium-term growth outlook and favourable external balances with a weak fiscal position and difficult business environment," it said.

However, the business environment is likely to gradually improve with the implementation and continued broadening of the government's structural reform agenda, it added.

Fitch Ratings, at the same time, acknowledged India's positive GDP growth outlook that stands out among peers.

It said that the country's real Gross Domestic Product (GDP) is expected to accelerate to 7.7 per cent in 2017-18.

"The agency expects structural reforms to increase growth, along with higher real disposable income supported by the implementation of the 7th Pay Commission recommendations and a monsoon with average rainfall expected by the India Meteorological Department," Fitch Ratings said.

"The government has been consistently rolling out its ambitious reforms agenda for almost three years and remains committed to continued reforms."

It said, "A rise in foreign direct investment (FDI) inflows to $55.5 billion in 2015-16 shows that India is becoming a more attractive destination for foreign investors. The government has also hinted at further reforms to support FDI inflows in its latest Budget."

India is not immune to external shocks, but the country's strong external finances make it less vulnerable than many of its peers, the agency noted.

Weak public finances also continue to constrain India's ratings, with a high general government debt, it said and added that there are indications that fiscal policy might become more focussed on bringing down debt.

Significant contingent liabilities also continue to emanate from public sector banks, it said.

"The banking sector's non-performing loans problem is well recognised by authorities, but continues to linger," it added.

"It is not likely that the government's budgeted Rs 700 billion ($11 billion or 0.5 per cent of GDP) capital injection into banks between 2015-16 and 2018-19 will be sufficient. Fitch estimates the banking system, including private sector banks, needs capital of around Rs 6 trillion ($90 billion or 3.2 per cent of GDP in 2018-19)," the agency said.
 
Print the Page Add to Favorite
 
Share this on :
 

Please comment on this story:
 
Subject :
Message:
(Maximum 1500 characters)  Characters left 1500
Your name:
 

 
  Customs Exchange Rates
Currency Import Export
US Dollar
66.20
64.50
UK Pound
87.50
84.65
Euro
78.25
75.65
Japanese Yen 58.85 56.85
As on 21 Nov, 2017
  Daily Poll
Is counterfeiting a major threat to SMEs?
 Yes
 No
 Can't say
  Commented Stories
» GST: Course correction(14)
» Starting an import export business: Basic guide for beginners(13)
» GST Council removes 178 items from 28% slab, only 50 left(6)
» Economic growth not possible without manufacturing: NITI Aayog CEO(1)
» Job creation: Labour ministry meets experts for solution(1)
 
 
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter