As India raised its pitch for upgrade of ratings from the current lowest investment grade, Atsi Sheth, vice-president and senior analyst, sovereign risk group, Moody's Investors Service, tells Business Standard that she does not foresee any movement from the current grade in the next 12-18 months.
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A higher subsidy burden and lower growth will weaken the country's fiscal metrics, analyst Atsi Sheth said in the presentation.
It expects Indian economy to grow by 6 per cent in 2013-14.
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The rupee had slumped to a record low of 59.9850 rupee to the dollar on Thursday, as the country's record high current account deficit is exacerbating its vulnerability in an emerging market rout.
Moody's on Sunday said any upgrade for the country will depend on consistent improvement in inflation, fiscal deficit and other economic parameters.
Finance Minister Arun Jaitley presented his maiden budget last week in which he vowed to contain fiscal deficit at 4.1 per cent this year and lower it to 3 per cent by 2016-17.
The Reserve Bank of India (RBI) cut its key repo rate by a bigger-than-expected 50 basis points.
The RBI has lowered interest rates by 1.25 per cent since January.
Spectrum auction proceeds to help plug fiscal deficit: Moody's.
India plans to keep its fiscal deficit within 3.9% of GDP.
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Moody's became the first rating agency to retain the sovereign rating of Baa3 for the country after the rupee dived below 63 to the dollar, on Monday.
Total fuel subsidies accounted for less than 1 per cent of GDP and under 3 per cent of total government expenditures in FY14.
Economist Arvind Panagariya has also argued for loosening deficit targets to boost capital spending
India Inc on Wednesday said the Reserve Bank's move to cut interest rate by 0.50 per cent is "pro-growth" and exhorted banks to transmit the lower interest rate to borrowers to revive demand and kick-start the investment cycle.
'Probability has increased for India to have improved fundamentals'.
A strong showing will be vital to Narendra Modi's chances of a second term.
Jaitley promised higher investment in roads and railways.
Budget clearly prioritised growth over fiscal consolidation, said Atsi Sheth, Senior VP, Moody's Investors Service.
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