Fitch Ratings said on Monday that India’s pace of decreasing debt is slow, causing a risk of decline in the credibility of the government in the event of major economic shock. However, the rating agency relied on India’s ability to stay on the fiscal outline in the medium period, which aims to reduce debt and bring it down over time.
Commenting on the General Budget 2025-26, Director and Primary Sovereign analyst of Fitch Ratings in India said, “The trust is increasing that the government can follow the fiscal framework in the medium period and the debt below the debt.” Can keep it. This will be positive for government credibility over time. ”
He said that still, the pace of debt reduction is slow, which makes the risk of risk with major economic shock. Fitch has placed India’s government credibility on ‘BBB-‘ with a stable approach. India’s rating has remained at this level since August 2006. This is the lowest level in the investment category. Juke also mentioned the government’s commitment to reduce the deficit even in the midst of a slow economic environment. The government has said to bring fiscal deficit 4.8 percent in FY 2024-25 and 4.4 percent in 2025-26 as compared to GDP (GDP).
Juke said that estimates are realistic and believe that the targets will be achieved. However, he warned that slow economic growth may lead to a slight decline in revenue collection, and will require additional restraint when spending.