BUDGET 2017 – Standard & Poor’s urged Indian Finance Minister Arun Jaitley on Wednesday to maintain the pace of fiscal consolidation in the annual budget next week and quickly reduce the country’s debt stock to bolster the prospects of a ratings upgrade.
The call from S&P’s analyst Kyran Curry comes as Jaitley faces pressure ahead of his fourth budget on Feb. 1 to cut taxes and hike spending – even at the cost of an earlier promise to trim the fiscal gap to 3 percent of GDP in 2017/18 from the 3.5 percent budgeted this year.
The ratings agency last November rebuffed New Delhi’s pitch for an upgrade, citing weak public finances. It affirmed India’s rating at “BBB-minus” with a “stable” outlook, putting Asia’s No.3 economy at the bottom rung of investment grade.
Curry reiterated those concerns, saying the pace of India’s debt accumulation and the debt stock remained “quite high”. While India’s debt-to-GDP ratio has improved to around 66 percent from 79.5 percent in 2004-05, it remains elevated for an emerging-market economy. READ MORE