labels: fitch ratings india, economy - general
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Our Economy Bureau
21 September 2002

Mumbai: Fitch Rating has hinted at a Standard and Poors (S&P)-like decision if Indias fiscal situation so continues. Fitchs review of rating is due in November 2002, which is barely one and half months away from now. Fitch already has a speculative grade BB+ rating on local debt.

Fitchs decision will follow S&Ps decision to downgrade Indias long-term rupee debt rating to BB+ from BBB-, and the short-term rating to B from A3. The global rating agency, while going ahead with a downgrade, had cited the countrys burgeoning fiscal deficit.

Going forward, the fiscal situation can change only if the privatisation programme continues, which is also looking marred.

Ambreesh Srivastava, the Singapore-based director of Fitch Ratings, says risks of a further downside exist, which will be taken up when Indias sovereign rating is reviewed. As of now, there is no change. We have a review planned in the next couple of months.

Besides the break in the privatisation momentum, there are other pressures on the economy, such as lower growth and lack of any major policy initiatives, says Srivastava.


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