15 C
New Delhi
Thursday 21 November 2019
Economy High debt burden constrains India's sovereign ratings: Fitch

High debt burden constrains India’s sovereign ratings: Fitch

-

- Advertisment -

Subscribe to our newsletter

You will get all our latest news and articles via email when you subscribe

The email despatches will be non-commercial in nature
Disputes, if any, subject to jurisdiction in New Delhi

New Delhi: Fitch Ratings today said high debt burden of the government constrains India’s rating upgrade, a day after Finance Minister Arun Jaitley projecting a fiscal deficit of 3.5% of GDP against the earlier target of 3.2%.

The 2018-19 Union Budget unveiled yesterday contains a number of policy measures with the potential to support economic demand and social well being.

These include those leading to rising in agricultural income and the ambitious health insurance plan while setting up new medical colleges.

“If implemented well, spending on such measures would likely reach a large part of the electorate, which is not insignificant with general elections coming up,” Fitch Ratings Director and Primary Sovereign analyst for India Thomas Rookmaaker said.

He said weak public finances “constrain India’s sovereign ratings, given a high general government debt burden of around 68% of GDP and a wide fiscal balance of 6.5% of GDP if states are included.

The Budget has pegged fiscal deficit at 3.5% of GDP in the current year ending March, higher than 3.2% targeted earlier.

For the next fiscal, the deficit is projected to be 3.3% of GDP.

“The government has kicked out its steady 3% fiscal deficit target further to 2020-21, well beyond its term.

This compares to its initial medium-term fiscal plan of 2014 when it first announced to postpone the 3% target by one year from 2016-17 to 2017-18,” Rookmaaker said.

The government’s commitment to embrace the recommendation of the FRBM committee to adopt a ceiling of 40% of GDP for central government debt is positive, even though the temporary delay in consolidation makes it unlikely that this debt level will be reached by 2022-23, as recommended by the committee last year, Rookmaaker said.

Citing weak fiscal position, US-based agency Fitch in May last year had kept India’s sovereign rating unchanged at ‘BBB-‘, the lowest investment grade with a stable outlook.

PTI

Leave a Reply

Opinion

Anil Ambani: From Status Of Tycoon To Insolvency

Study the career of Anil Ambani, and you will get a classic case of decisions you ought not take as a businessman and time you better utilise

तवलीन सिंह, यह कैसा स्वाभिमान?

‘जिस मोदी सरकार का पांच साल सपोर्ट किया उसी ने मेरे बेटे को देश निकाला दे दिया,’ तवलीन सिंह ने लिखा। क्या आपने किसी क़ीमत के बदले समर्थन किया?

Rafale: One Embarrassment, One Snub For Opposition

Supreme Court accepts Rahul Gandhi's apology for attributing to it his allegation, rejects the review petition challenging the Rafale verdict

Guru Nanak Jayanti: What First Sikh Guru Taught

While Guru Nanak urged people to 'nām japo, kirat karo, vand chhako', he stood for several values while he also fought various social evils

Muhammed Who Inconvenienced Muslims

Archaeologist KK Muhammed had earlier got on the nerves of the leftist intelligentsia for exposing their nexus with Islamic extremists
- Advertisement -

Elsewhere

JEE: Why no Bangla, asks CM; you opted out, reminds guv

The JEE used to be conducted in English alone for a long time. Then they added Hindi. This year, Gujarati is a regional language in which questions can be answered

NRC across India, says Shah; not in West Bengal, retorts Banerjee

Home Minister Amit Shah said the NRC exercise would be undertaken across India, but Bengal CM Mamata Banerjee wouldn't allow it in her State

CISF nabs Raja Babu-style ‘pilot’ during his 16th impersonation

Rajan Mahbubani, after being arrested by CISF and handed to Delhi Police, confessed he had a fetish for masquerading as various professionals

The cumin in your kitchen may be spurious

Delhi Police has busted a gang that made fake cumin, sourcing raw material from UP and selling the spurious product in Gujarat and Rajasthan

Pollution: MPs dump other Indians in favour of farmers

Farmers dominated Manish Tewari's arguments in the debate on pollution in Delhi-NCR though stubble disposal machines are subsidised already

You might also likeRELATED
Recommended to you

For fearless journalism

%d bloggers like this: