Moody's retains rating outlook, wants India to contain deficit
for the current fiscal to 5.3 per cent of the GDP, from 5.1 per cent, in view of increased subsidy outgo.
"Fiscal data available thus far suggest that meeting the deficit will present a challenge," Moody's said.
In the near term, it said improvement in fiscal situation would depend in increasing tax revenues and expediting PSU disinvestment.
On the possibility of a rating upgrade, Moody's said an improvement in investment climate, project completion and reduction in infrastructure bottlenecks could lead to an upgrade.
It, however, cautioned that a continued increase in government debt ratio and worsening of the balance of payments situation could lead a ratings downgrade.
In the recent months, the government has taken series of reform measures to boost investor sentiment, including hiking FDI limit in retail, insurance among others besides easing overseas borrowings norms to stimulate infrastructure
investment.
Last week it also deferred the controversial General Anti Avoidance Rules (GAAR) by two year to April 2016.
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