Mumbai: The international rating agency Moody’s Investors Services (“Moody’s”) has lowered India’s credit ratings to “negative” from stable. The agency said that the decision was taken because of the increasing risks that the economic growth of Indian will remain materially lower than in the past. The debt burden may also rise to from the already higher levels.
Moody’s expects that the Government will face significant constraints in narrowing the general government budget deficit if the nominal GDP growth does not return to higher rates. Moody’s stated that the major reasons for the slowdown are weak job creations, the financial stress in the rural households and the credit crunch among non-bank financial institutions (NBFIs).
The Finance Minister in response to this said that the Government has initiated a series of financial and other reforms to stabilize the economy. She also stated that the Government has taken policy decision with regards to the global slowdown.