India's growth story credible, FinMin tells Moody's

Admitting that economic picture is not fully rosy, Finance Ministry on Tuesday told global rating agency Moody's that the country's growth story is credible and government is taking steps to deal with the fiscal issues.

". . . its not as if the picture is fully rosy. . . All we have said is that we know there are problems but we have to take actions in a particular manner and the government is fully committed to take action so that the problem that we are seeing today are fully addressed," Economic Affairs Secretary Arvind Mayaram said.

. . .

He was talking to reporters after a meeting with Moody's representatives.

Rating agencies hold such meetings with government officials to access the economic situation.

Last week the agency had said India's sovereign outlook is stable and does not warrant any action on the country's credit rating in the next 12-18 months.

Moody's wanted to learn from the Finance Ministry officials, the steps taken to check subsidy outgo and impact of the proposed right to food bill on the exchequer.

. . .

"We have a credible story that we have told them and they have appreciated what we have said. Now rest is upto them," Mayaram said.

The secretary said the fiscal numbers as well as the inflation situation has improved since the last meeting with Moody's representatives.

"We raised the same points but with additional numbers.

"Everyday the numbers improve. . .The last time we had met (Moody's) they (the numbers) have improved further.

"So that's a good sign," he added.

. . .

While India's growth slipped to a decade's low of 5 per cent in 2012-13, the government has been able to bring down the fiscal deficit to 5.2 per cent of the GDP during the period.

Government has also taken tough decisions like raising diesel prices and pruning subsidies on LPG, fertiliser and sugar.

The inflation too slowed to three-year low of 5.96 per cent in March.

In January, Moody's had reaffirmed 'Baa3' sovereign credit rating for India that indicates investment grade, with a stable outlook.