Thursday, May 28, 2009

Fwd: India’s debt affordability poor: Moody’s

the legacy of the dream team of economists - india is in a financial mess. 

---------- Forwarded message ----------
From: Girish

NEW DELHI: Global rating agency Moody's on Thursday warned that India's financial strength has weakened due to its "poor debt affordability" and the country's fiscal policy predictability and credibility have also deteriorated.
Moody's said the country's poor fiscal fundamentals mainly result from "a deeply entrenched framework of subsidies and the government's relatively weak expenditure restraint."
Besides, the much-needed fiscal reforms such as rationalisation of subsidies and reduction of price controls, as well as disinvestment, have not materialised, although these could help improve the government's fiscal and debt positions.
"These have been impeded in the previous five years of the Congress-led governing alliance by the fractious nature of India's politics and a populist impulse in policy formulation," Moody's said in its annual report.

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