Credit rating agency Fitch said on Friday that improvement in India’s rating has stalled due to heavy debt burden on the government. It is not less than a shock to the government engaged in an effort to upgrade consistently ratings. Fitch’s statement came at a time when Finance Minister Arun Jaitley, in a budget presented before one day, has increased the fiscal deficit target from 3.2 per cent to 3.5 per cent of GDP.
Several policy measures were announced for the economic needs and social well-being in the budget. These include ambitious medical insurance scheme, including increase in agricultural income and new medical colleges. Thomas Rukmakar, director of Fitch Ratings (India) and the primary sovrean analyst, said, “If the implementation is good, then the expenditure in these areas will reach a large section of the voters.
That can not be said to be unimportant in the forthcoming elections. “The government’s weakened Mali condition has blocked the improvement of India’s Sovereign rating.
Government has a debt burden of nearly 68 percent of GDP. If states are included then the fiscal deficit is 6.5 percent of GDP. Fitch had stabilized India’s Sovereign rating BBB (minus) by referring to a weak financial situation in May last year.