India rating outlook positive on gradual reforms: Moody's

New Delhi: Moody’s Investors Service on Monday said that India’s growth outlook is positive, in its annual credit analysis of government bonds. It said that India’s credit profile is supported by its strong growth potential, a large economy and high private savings rate which mitigates the risk of high government debt. The banking sector, sitting on a pile of Rs.6.3 trillion bad loans, continues to be a key source of risk.

“The outlook for India’s rating is positive. This reflects our expectation that policies over the next 12 to 18 months will support sustained growth, accompanied by narrower fiscal deficits, low current account deficits, increased savings and investment, and inflation that is within the central bank’s targets,” the credit rater said in a statement.

However, it cautioned that India’s credit strengths are also offset by regulatory and infrastructure constraints on its competitiveness, slow pace of policy reform, and the contingent liability risk to the sovereign from public sector banks’ high and rising non-performing loans.

The table below has details on how Moody’s arrived at this assessment.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.