Goyal also pointed out that rating agencies often exaggerate minor disruptions or policy changes, creating unnecessary panic, adding that several strong and fundamentally sound companies end up suffering due to such reactions, which fail to take into account India’s broader economic context.
Govil, in an exclusive interaction with Moneycontrol, spoke on a range of issues from the fiscal implications of the 8th Pay Commission to the chances of a rating upgrade.
Economic Affairs Secretary Ajay Seth said that the strength of the Indian economy including its public finances, deserves a much better rating.
According to Christian de Guzman of Moody's, while the interim Budget firmly conveyed India's commitment to its fiscal consolidation, the government's ability to meet its targets could be restricted due to a variety of factors
This despite improvement in asset quality, with a decline in the number of non-performing assets
Earlier, the risk posed to the MSME sector was not computable owing to the lack of data.
Rating agencies had gone into a downgrading overdrive in December, the month after the government decided to do away with 86 percent of the currency in circulation.
The Indian securitisation market is not seeing any takers especially after pass through certificates came under the tax department's scanner earlier this year. The task of reviving this market now falls on the finance ministry, reports CNBC-TV18's Mitra Joshi and Ashmit Kumar.
Euro zone finance ministers are to agree on Tuesday the details of bolstering their bailout fund to help prevent contagion in bond markets, under pressure from the United States and ratings agencies to staunch a two-year-old debt crisis.
Senior US Treasury officials on Wednesday played down chances that their future debt sales strategy will be affected by a possible downgrade of US debt by ratings agencies.
Japan will suffer severe economic costs from Friday's devastating earthquake and tsunami but ratings agencies Moody's and Standard & Poor's said they did not anticipate changing their ratings stances as a result.