Govt seeks $4.2 bn from World Bank to recapitalise banks
Govt is seeking a funding of $4.2 bn from World Bank towards banks recapitalisation. Gainers: BSE ( A, B ) | NSE | Losers: BSE ( A, B ) | NSE | 52 Week: High, Low
By ET Online and Agencies |
NEW DELHI: Government is seeking an additional funding of $4.2 billion from World Bank towards banks recapitalisation, the Finance Secretary Arun Ramanathan said on Monday.
India's fiscal deficit is forecast at 5.5 percent of gross domestic product in the next fiscal year starting April, compared with 6.0 percent in 2008/09.
Rising outstanding federal debt and a worsening fiscal deficit outlook are worrying factors, Takahira Ogawa, a credit analyst at Standard & Poor's in Singapore told Reuters in a telephone interview.
"The federal debt as a percentage of GDP and the rising fiscal deficit are two significant factors which are constraining ratings and that is something which also may pull them lower," he said, after the budget was presented.
Standard and Poor's rates Asia's third-biggest economy's local currency rating at "BBB - minus", or the lowest investment-grade level, with a stable outlook.
Fitch has a similar rating but with a negative outlook while Moody's pegs it at one notch lower at speculative grade.
"We will review the ratings after the fresh announcement but there is no specific timeline for that," Ogawa said.
India's fiscal deficit is one of the highest in the world and two stimulus packages announced in recent months to shore up sagging growth have put pressure on finances while tax collections have slowed sharply.
Fitch said last week the government's total outstanding debt would reach 77.9 percent of GDP this year and said these levels were "outliers" among sovereign countries rated at the BBB level.
India's fiscal deficit is forecast at 5.5 percent of gross domestic product in the next fiscal year starting April, compared with 6.0 percent in 2008/09.
Rising outstanding federal debt and a worsening fiscal deficit outlook are worrying factors, Takahira Ogawa, a credit analyst at Standard & Poor's in Singapore told Reuters in a telephone interview.
"The federal debt as a percentage of GDP and the rising fiscal deficit are two significant factors which are constraining ratings and that is something which also may pull them lower," he said, after the budget was presented.
Standard and Poor's rates Asia's third-biggest economy's local currency rating at "BBB - minus", or the lowest investment-grade level, with a stable outlook.
Fitch has a similar rating but with a negative outlook while Moody's pegs it at one notch lower at speculative grade.
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"We will review the ratings after the fresh announcement but there is no specific timeline for that," Ogawa said.
India's fiscal deficit is one of the highest in the world and two stimulus packages announced in recent months to shore up sagging growth have put pressure on finances while tax collections have slowed sharply.
Fitch said last week the government's total outstanding debt would reach 77.9 percent of GDP this year and said these levels were "outliers" among sovereign countries rated at the BBB level.
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