'India needs good ratings to fix account deficit'
Kolkata, March 9 : India needs good ratings from global agencies to bring down the high current account deficit (CAD) to a sustainable level, adviser to the finance minister Parthasarathi Shome said Saturday.
According to Shome, good ratings from the international rating firms would help India attract more foreign capital inflow and prohibit capital outflow.
"To correct our current account deficit, which we cannot afford to the extent that we have, we need foreign capital inflow. We need also to keep our own investors, prohibiting capital outflow. We moved away from that kind of a regime. For all that we need a good rating," Shome said at a seminar organised by St. Xavier's College and the Chamber of Commerce and Industry here.
Shome's comments came close on the heels of the finance ministry's Chief Economic Adviser Raghuram Rajan's observations that India's record high CAD was the country's biggest concern.
"We need good international ratings of agencies who follow very closely the fiscal deficit and current account deficit behaviour of an economy," Shome said, adding therefore the government should stick to the current account deficit and fiscal deficit targets.
Earlier, Goldman Sachs had said CAD remained the biggest risk to India's growth story.
Following the budget for 2013-14, presented by Finance Minister P. Chidambaram, Fitch Ratings said the country's economic outlook remained "uncertain" due to risks from global developments and domestic policy constraints.
Another global rating agency Moody's, however, said the Indian economy was headed for better times.