Sitharaman says ratings agencies should take note of India's reforms, macro stability

Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said global ratings agencies should view India's reforms as a whole and  that macroeconomic stability had been maintained.

Asked if she was expecting an upgrade after the impressive fiscal consolidation targeted for 2024-25, Sitharaman told Rahul Joshi, Editor-in-Chief, Network18 on February 2 in a post-Budget interview that she hoped the ratings agencies "do their job".

"But periodically it's our business also to bring it to their notice that economies, particularly emerging market economies like India, despite the odds, we are doing a lot of reforms, systemic reforms, which actually you are seeing is bearing the results now," the finance minister said.

Also Read: FM's message to ratings agencies – govt bettering fiscal roadmap

The Indian government has been in a running battle with global ratings agencies S&P Global Ratings, Moody's Investors Services, and Fitch Ratings as it thinks the sovereign rating assigned to the country is not a fair reflection of its economic strength.

In her post-Budget press conference on February 1, the finance minister said that her message to ratings agencies is that not only was the Indian government aligned with its fiscal consolidation road map, it is "even bettering it".

As per the interim Budget, the Centre is targeting a fiscal deficit of 5.1 percent of GDP in 2024-25, well below expectations of 5.3 percent.

"The Atmanirbhar Bharat announcements were all infused with so many reform measures. Otherwise we wouldn't have eliminated more than 68,000 rules which were just so archaic and becoming instruments for rent-seeking people. So systemic reforms have continued, whether it was pre-COVID GST and IBC, together with many other reforms like professionalising public sector banks and so on," she said.

Also Read: FM Sitharaman says govt open to SBI, ONGC disinvestment

According to the finance minister, the Budget has continued the reform pace by emphasising on transparency and keeping anything "outside the Budget or underneath the carpet".

"These are not small steps," she said, adding that even "small ones" were having "very big implications" on the economy.

"The bigger ones, which are bearing results in terms of the money that you collect in GST, these are not small steps. So that is the one which I would play as important indicators which ratings agencies should look at comprehensively rather than look at just one detail here, one detail there. Macroeconomic stability is also very well kept up," she added.