At a meeting with the representatives of ratings agency Fitch, union finance ministry officials raised the issue of upgrading the credit rating of the country.
However, during the meeting, the global rating agency expressed concerns on how deficits will be met and on the ability of the government to meet revenue targets.
But the ministry officials convinced the rating agency
that investment cycle in the economy would reverse and gold import is declining, thereby expressing confidence that current account deficit (CAD) will fall.
The officials of the ministry also explained that the benign crude oil prices and stability in the rupee exchange rate may help reduce current account deficit.
The efforts of the government to expedite big ticket infrastructure projects may improve investment climate, the finance ministry officials explained the rating agency.
The cabinet committee on investment (CCI) has approved projects worth Rs 70,000 crore in three months time. These are infrastructure projects and will have positive impact on cement industry and steel industry.
Earlier, the Fitch threatened to downgrade India’s credit rating owing to the expansionary policy which led to a rising fiscal deficit. The fiscal deficit had touched a high of 5.8 per cent in 2011-12.