Question

Which is correct about India’s sovereign rating by Fitch?

(A) India’s rating is BBB-, which is the lowest investment grade rating

(B) India’s long-term foreign and local-currency issuer default ratings were also fixed at ‘BBB-

(C) The rating is mainly due to the weak state of the government’s finances.

A Only (A) Correct Answer Incorrect Answer
B Only (A) & (B) Correct Answer Incorrect Answer
C Only (A) & (C) Correct Answer Incorrect Answer
D Only (B) & (C) Correct Answer Incorrect Answer
E All (A) (B) and (C) Correct Answer Incorrect Answer

Solution

Fitch has acknowledged India’s strong growth and recent economic reforms, but it has a given a BBB- rating owing to the weak state of the government’s finances. According to Fitch India’s general government debt burden was 67.9% of GDP whereas the ‘BBB’ median is 40.9%.

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