The finance ministry is scheduled to meet representatives of global ratings agency Moody's next week and pitch for a sovereign rating upgrade as the economy is showing faster-than-expected recovery from the pandemic-induced contraction. As part of a routine process, every year there is a meeting with global rating agencies, sources said.

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There was a meeting with Fitch a couple of months ago, they said, adding next week the ministry officials will meet Moody's representatives. There would be a presentation on the state of the economy and various reforms undertaken by the government to boost recovery, the sources said.

The meeting, scheduled for September 28, would also provide details about the country's preparedness to meet its Budget estimate numbers like fiscal deficit and borrowing. Last year, Moody's Investors Service downgraded India's sovereign rating to 'Baa3' from 'Baa2', saying there will be challenges in the implementation of policies to mitigate risks of a sustained period of low growth and deteriorating fiscal position.

'Baa3' is its lowest investment grade, just a notch above junk status. "The decision to downgrade India's ratings reflects Moody's view that the country's policy-making institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector," it had said in a statement.

Moody's had in November 2017, after a gap of 13 years, upgraded India's sovereign credit rating by a notch to Baa2 from Baa3. The Indian economy contracted 7.3 percent in the 2020-21 fiscal but is expected to clock double-digit growth during the current fiscal ending March 2022 on the back of rapid vaccination and demand coming back across sectors.

The Reserve Bank of India (RBI) had in June lowered the growth projection for 2021-22 to 9.5 percent from 10.5 percent estimated earlier. The Asian Development Bank (ADB) earlier this week lowered India's growth projections for the current financial year by a percentage point to 10 percent, mainly due to disruptions in economic activity caused by the second wave of the COVID-19 pandemic.

In April, ADB had projected a growth rate of 11 percent in 2021-22 for India.

First Published:Sept 23, 2021 9:24 PM IST