Standard & Poor’s said the budget would not have an impact on India’s sovereign ratings until the agency could see how the measures will be implemented, especially regarding meeting the fiscal deficit target.
Finance Minister Arun Jaitley said last week India would stick to the fiscal deficit target of 4.1 per cent of gross domestic product for the year ending in March 2015 unveiled by the previous government.
“We think the budget is favourable to credit fundamentals to the extent that fiscal debt and interest ratios are expected to continue to improve,” said Agost Benard, an associate director, at Standard & Poor’s Ratings Services during a teleconference with reporters.
“But it remains to be seen how and to what extent will the various measures proposed be implemented and in particular how the deficit targets will be met,” he added.
The comments reiterated S&P’s statement last week after the budget. S&P is the only of the three major credit agencies to have a “negative” outlook on India.