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Corruption, uncertain policies remain key concerns on India: Moody

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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)

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  • Shubhi Mangla

    India has gifted the world with best mathematicians like Srinivasa and Aryabhata

  • Pritam Go Green

    Caste based reservation system is the main culprit of corruption in INDIA

    • Pashchiema Bhatia

      mainly because of the politicians who consider it as a vote bank

      • Pritam Go Green

        Mainly in North Eastern India ..where literacy rate is not up to the mark ,political leaders mislead those innocent people in the name of development promises.
        All this needs to be eradicated fast if India wants to be a developed nation.

SHARE
  • Shubhi Mangla

    India has gifted the world with best mathematicians like Srinivasa and Aryabhata

  • Pritam Go Green

    Caste based reservation system is the main culprit of corruption in INDIA

    • Pashchiema Bhatia

      mainly because of the politicians who consider it as a vote bank

      • Pritam Go Green

        Mainly in North Eastern India ..where literacy rate is not up to the mark ,political leaders mislead those innocent people in the name of development promises.
        All this needs to be eradicated fast if India wants to be a developed nation.

Next Story

Google Maps: India Based ‘Two-Wheeler’ Feature Launched to Whole Asia

The new travel mode in Google Maps is seen alongside Drive, Train or Bus and Walk alternatives.

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Google, while announcing this at an event in Thailand, did not elaborate when this option would be available on iOS devices as well as reach Western markets. Pixabay

The “two-wheeler mode” in Google Maps that first arrived in India last December has been extended to Hong Kong, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Taiwan, Thailand and Vietnam.

To be first available for Android users, the motorcycle-specific navigation will help bikers find the most suitable routes in these countries, The Verge reported late on Thursday.

“The goal is for drivers to read through the directions first to help memorise the path before they start navigating, especially since these countries tend to contain roads and alleyways without actual names,” the report said, quoting Krish Vitaldevara, Google Maps’ Head of Product.

Google, while announcing this at an event in Thailand, did not elaborate when this option would be available on iOS devices as well as reach Western markets.

Google
In December, Google incorporated navigation routes for two-wheelers with Voice Assistant capabilities in its Maps feature in India.

In December, Google incorporated navigation routes for two-wheelers with Voice Assistant capabilities in its Maps feature in India.

The new travel mode in Google Maps is seen alongside Drive, Train or Bus and Walk alternatives.

“The India-first feature is the new “two-wheeler mode” in Google Maps. India is the largest two-wheeler market in the world, and the millions of motorcycle and scooter riders have different navigation needs than drivers of automobiles,” Caesar Sengupta, Vice President, Next Billion Users Team at Google, had said during the launch.

Also Read-Google Rolls out ‘Maps’ Updates Globally

Two-wheeler mode in Maps shows trip routes that use “shortcuts” not accessible to cars and trucks.

It also provides customized traffic and arrival time estimations. (IANS)