Amid rising doubts over the widening country’s fiscal deficit number, global rating agency Fitch has said that the government's efforts to avoid non plan expenditures ahead of general elections, so as to achieve the fiscal deficit target of 4.8 percent of the GDP in 2013-14, are supportive for the country's credit rating. However, Fitch warned that any slippage on the fiscal front will be negative for country's credit ratings. The rating agency affirmed India's sovereign rating at 'BBB-', which is at the lowest investment grade with stable outlook.
Further, credit rating agency stated that it will wait for next government's policies before determining the future rating as it will provide important information for determining future outlook for India's rating. Earlier in October, Fitch had earlier noted that the government would have to go for greater expenditure cuts in the remainder of the financial year to meet its fiscal deficit target.
India's fiscal deficit reached to Rs 5.1 lakh crore or 94% of the targeted budgetary estimate of Rs 5.42 lakh crore in the April-November period of current fiscal mainly due to the sluggish revenue collection amid prevailing economic slowdown. Meanwhile, in order to contain the country's fiscal deficit within target level, the government has been taking a number of measures including banning government departments for holding meetings in 5-star hotels among others to cut government spending in non-critical areas. Furthermore, the government has been expressing confidence to meet the divestment target of Rs 40,000 crore for current fiscal despite the fact it has so far only managed to raise Rs 3,000 crore.
Further, credit rating agency stated that it will wait for next government's policies before determining the future rating as it will provide important information for determining future outlook for India's rating. Earlier in October, Fitch had earlier noted that the government would have to go for greater expenditure cuts in the remainder of the financial year to meet its fiscal deficit target.
India's fiscal deficit reached to Rs 5.1 lakh crore or 94% of the targeted budgetary estimate of Rs 5.42 lakh crore in the April-November period of current fiscal mainly due to the sluggish revenue collection amid prevailing economic slowdown. Meanwhile, in order to contain the country's fiscal deficit within target level, the government has been taking a number of measures including banning government departments for holding meetings in 5-star hotels among others to cut government spending in non-critical areas. Furthermore, the government has been expressing confidence to meet the divestment target of Rs 40,000 crore for current fiscal despite the fact it has so far only managed to raise Rs 3,000 crore.
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