Global rating agency Standard & Poor’s has said it is evaluating policies of the Narendra Modi-led BJP government for a review of India’s sovereign rating, now pegged at the lowest investment grade.

“...we are evaluating the new government’s policies and are forming a view on the likelihood of their success,” S&P analyst Agost Benard told PTI when asked if the agency was contemplating a review of India’s sovereign rating.

“Any rating implications or possible changes to the outlook on the rating will be communicated to the market and the media through the usual channels,” he said in the e—mail reply.

S&P representatives had recently held extensive discussions with Finance Ministry officials.

The agency however refused to share the details saying it is “confidential”.

The senior finance ministry officials had impressed upon the agency the government’s resolve to push economic reforms, promote growth and contain fiscal deficit at 4.1 per cent in 2014—15, sources said.

They are reported to have informed the S&P about the government’s roadmap to reduce fiscal deficit to 3 per cent by 2016—17.

In order to promote growth and investment, Finance Minister, Arun Jaitley, in his budget 2014—15 had announced a host of measures to accelerate economic growth. The measures included allowing greater foreign direct investment in insurance and defence, increasing spending on infrastructure, and introducing tax incentives for savings and investment.

S&P currently rates India as ‘BBB—’, the lowest in the investment grade, with a negative outlook. The agency frequently updates its credit rating.

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