Finance Ministry officials to meet Moody's representatives on June 16, pitch for rating upgrade

The government had largely met its fiscal objectives over the past two years. The fiscal deficit, which is the difference between government expenditure and revenue, narrowed to 6.4 percent of GDP in 2022-23 fiscal, from 6.7 percent of GDP in 2021-22 fiscal.

In the current fiscal, the deficit is budgeted at 5.9 percent of GDP.

As per the fiscal consolidation roadmap, the government intends to bring down the fiscal deficit below 4.5 percent of GDP by 2025-26.

Last month, two other global rating agencies S&P and Fitch had kept India’s rating unchanged at 'BBB-', with a stable outlook.

All three global rating agencies — Fitch, S&P and Moody’s — have the lowest investment grade rating on India, with a stable outlook. The ratings are looked at by investors as a barometer of the country’s creditworthiness and impact borrowing cost.

In an interview with PTI last week, Moody’s Investors Service Associate Managing Director Gene Fang said the Indian economy is expected to clock a 6-6.3 percent economic growth in the June quarter, and flagged risks of fiscal slippage arising from weaker-than-expected government revenues in the current fiscal.

For the full 2023-24 and 2024-25 fiscals, Moody’s projects economic growth at 6.1 percent and 6.3 percent, respectively.

On a calendar year basis, Moody’s expects growth to be 5.5 percent in 2023, which could improve to 6.5 percent in 2024.