Never miss a story

Get subscribed to our newsletter


×
Image: youtube.com

Fiscal consolidation and moderate inflation are definite pluses for India, but graft, uncertain policies and their weak execution remain key constraints, according to Moody’s Investors Service.

In an e-mail interview with IANS, Marie Diron, senior vice president for the Sovereign Risk Group, said the agency’s assessment of India is based on its own evaluation, as also that of the World Bank on government’s effectiveness, rule of law and inflation control. This is what she said:


“India’s score are in the moderate range, reflecting checks and balances between the executive, legislature and judiciary, and increasing fiscal and monetary policy transparency,” she said.

“However, corruption, policy uncertainties and slow implementation have constrained our assessment of India’s institutional strength.”

Moody’s also expected fiscal consolidation to be gradual — as a result of specific measures on which a consensus can be reached, rather than broad-ranging fiscal strategies. So high levels of government debt, at around 65 percent of GDP, will continue to be a constraint on India’s rating.

“Besides the implications of fiscal policy for the government debt burden, the broad macroeconomic policy context has become more favourable to sustain growth. The government’s repeated commitment to fiscal consolidation contributes to maintaining inflation at moderate level.”

On the external sector, Diron said the impact on India of China’s rebalancing, the general and economic developments there will be mainly indirect. This because the share of India’s exports to China is much lower — around 3.7 percent — than for some other economies in the region.

“As a result, India would be affected by a slowdown in Chinese demand mainly to the extent that the global economy would be affected. Moreover, if such a slowdown were to lead to renewed falls in commodity prices, India as an importer of commodities would benefit,” Diron said.

“Further, China’s rebalancing may contribute to global volatility in capital flows. However, with narrower current account deficit financed by foreign direct investment, India is less vulnerable to a shift in investor sentiment and global capital flows than it would have been few years ago.”

Related article:Economic conditions of India remains weaker than peers: Moody

Diron’s assessment comes against the backdrop of the caution by Moody’s Investors Service that a prolonged worsening in asset quality of state-run banks was the main threat to India’s sovereign credit profile, while suggesting that the government must recapitalise them with more money.

Moody’s, which has given for India a credit rating at ‘Baa3’ — or just a level above the junk category — had said on Wednesday that it would consider a rating upgrade after 12-18 months, depending on improvement in macroeconomic parameters in India.

Nonetheless, its outlook on the country remained positive.

“Our positive outlook on India’s rating is based on our expectations of continued but gradual policy efforts to reduce the sovereign risks posed by high fiscal deficits, volatile inflation and weak bank balance sheets.” (IANS)


Popular

VOA

This 2020 electron microscope image provided by the National Institute of Allergy and Infectious Diseases - Rocky Mountain Laboratories shows SARS-CoV-2 virus particles, which cause COVID-19.

A cheap antidepressant reduced the need for hospitalization among high-risk adults with COVID-19 in a study that was looking for existing drugs that could be repurposed to treat coronavirus.

Researchers tested the pill used for depression and obsessive-compulsive disorder because it was known to reduce inflammation and looked promising in smaller studies.

Keep Reading Show less
Flickr

Even one of the world's most powerful tech CEOs can forget to unmute himself during a video chat.

Even one of the world's most powerful tech CEOs can forget to unmute himself during a video chat. For Alphabet and Google CEO Sundar Pichai, one such embarrassing moment came as he began the chat with Kermit The Frog, a character from Muppets, on Google Meet recently. Sharing the two-minute video clip on Twitter on Wednesday, Pichai said: "Always remember to unmute thanks @KermitTheFrog for joining us on @YouTube #DearEarth and chatting about some of our shared interests."

The video was part of YouTube's "Dear Earth" series which aims to address climate challenges. "Hi there, Sundar," said Kermit, a Muppet character created in 1955, to which, Pichai replied but he was inaudible as he was on mute. "Sundar, I think you are on mute. Wow, can't believe I am talking to the CEO of Google, and he is on mute," Kermit said.

At that point, Pichai realised he was on mute. "Sorry, Kermit. I was on mute, and I've done it a few times this year like everyone else. I'm a huge fan of you and the muppets," replied the Google CEO. The video chat went smooth after the opening glitch, and Kermit The Frog and Pichai spoke about climate issues the world is grappling with. (IANS/ MBI)


Keep Reading Show less
Photo by Timon Studler on Unsplash

The research, published in the journal Psychological Science, showed that moral views concerning both recreational drugs and openness to non-committed sex are approximately 50 per cent heritable

A person's disapproval of noncommittal sex and their condemnation of recreational drug use may have a common genetic basis, suggests a study. The research, published in the journal Psychological Science, showed that moral views concerning both recreational drugs and openness to non-committed sex are approximately 50 per cent heritable, with the remaining 50 per cent explained by the unique environment.

Furthermore, approximately 75 per cent of the relationship between openness to non-committed sex and moral views concerning recreational drugs was explained by genetic effects, and the remainder was explained by the unique environment. "People adopt behaviours and attitudes, including certain moral views, that are advantageous to their own interests," said lead author Annika Karinen, a researcher at Vrije Universiteit Amsterdam in the Netherlands.

water droplets on glass during daytime A person's disapproval of noncommittal sex and their condemnation of recreational drug use may have a common genetic basis, suggests a study. | Photo by Braňo on Unsplash

Keep reading... Show less