International rating agency Standard & Poor's has affirmed its 'BBB-/A-3' credit ratings for India. The outlook for country remains stable, the agency said. S&P affirms ‘BBB-/A-3’ rating on India with stable outlook.
The rating for India is unlikely to be upgraded for the next two years.
"The stable outlook balances India's sound externalposition and inclusive policymaking tradition against thevulnerabilities stemming from its low per capita income andweak public finances," S&P Global Ratings said in a statement.
"The outlook indicates that we do not expect to changeour rating on India this year or next, based on our currentset of forecasts," it said. 'BBB-' indicates lowest investment grade rating. S&P said the upward pressure on the credit ratings couldemerge if the government reforms markedly improve India'sfiscal performance and pushes down the level of net generalgovernment debt below 60 per cent of the GDP. Currently, government debt amounts to about 69 per centof the GDP.
S&P said improvements in policymaking continue tostrengthen and flagged wide fiscal deficits, a heavy debtburden, and low per capita income as concerns.
Downward pressure on the ratings could re-emerge ifgrowth disappoints as a result of stalling reforms or ifinterest rate-setting monetary policy committee does notachieve inflation targets. A higher-than-expected deterioration in the nation'sexternal liquidity position could also put downward pressureon ratings, S&P added.
The rating agency expects India's economy to grow 7.9 percent in 2016 with current account deficit at 1.4 per cent ofthe gross domestic product. It also expects the RBI to meetits inflation target of 5 per cent by March 2017.
S&P had last in September 2014 upgraded India's rating tostable from negative