Rains can't batter Kerala's growth! S&P assigns 'BB' rating to state govt

Global rating agency Standard and Poor's has assigned long-term rating "BB" to the state of Kerala, first such rating by a rating agency to the state government in India.

The short term rating rating is placed at "B". Outlook is stable for both ratings.

S&P in a statement said ratings on Kerala reflect the Indian state's weak budgetary and debt metrics driven by its large spending on socio-economic welfare to support a low-income economy.

The economy has been been hit hard by floods and devastation caused by heavy rains during current monsoon season.

The state's internal liquidity position is very weak but mitigated by proven access to deep domestic capital markets. The rating on Kerala benefits from a central government framework that has a track record of providing extraordinary support toward debt relief, the agency said.