India’s fundamentals demand a much better rating, Chief Economic Advisor Krishnamurthy Subramanian said on Thursday after Moody’s downgraded the country’s rating and S&P retained it at the lowest investment grade.
India’s ability and willingness to repay debt is gold standard, he said making a case for ratings upgrade.
He took comfort in rating agencies acknowledging India’s reforms, saying these are critical elements for higher growth next year.
On economic growth this year, he said it will depend on when recovery happens. It is uncertain if the recovery will happen in the second half of this year or next year, he said, adding the finance ministry was working on a large range of growth estimates for this year and a recovery in the second half or next year is also part of baseline expectation.
The finance ministry, he said, has evaluated pros and cons of options such as deficit monetisation. “We keep all options under consideration and will be evaluating them.”
On privatisation policy, he said that banking will form part of the strategic sector and the government is working on to identify strategic and non-strategic sectors.