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Moody’s Investor Service on Tuesday said that a review of India’s sovereign ratings will take at least another one to two years.
“There has to be more evidence over time of faster fiscal consolidation, more tangible reforms and resolution of the asset quality of the banking sector,” said Marie Diron, Senior Vice-President, Sovereign Risk Group, Moody’s Investors Service.
India currently has a sovereign rating of BAA3 with a positive outlook by Moody’s but has been pitching for an upgrade pointing to its faster economic development and lower fiscal deficit.
Representatives from Moody’s will be meeting with the Economic Affairs Secretary, Shaktikanta Das, and senior Finance Ministry officials for their annual review.
Last year in April, Moody’s had changed India’s rating outlook to ‘positive’ from ‘stable’ citing reform momentum and said it could consider India for a rating upgrade in the next 12-18 months.
However, Diron said the upgrade will take more time due to continued weakness in private sector investments.
She added that the credit implications of India’s reforms will take place over the medium term and noted that there was a need for further reforms in physical and social infrastructure as well as land and labour.
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