Moody's Ratings on Tuesday projected general government debt to stabilise above 80 per cent of GDP over the next three years, down from 89.3 per cent in 2020-21. "General government interest payments to fall to around 24 per cent of general government revenue over the next two years from over 28 per cent in fiscal 2020-21, although this remains much higher than the median 8.7 per cent recorded by Baa-rated peers," Moody's Ratings associate managing director Gene Fang said in a post-Budget reaction.
Moody's on Thursday upped India's growth projection for the next financial year beginning April 1, to 13.7 per cent, from 10.8 per cent estimated earlier, on the back of normalisation of activity and growing confidence in the market with the rollout of COVID-19 vaccine. For current fiscal, the US-based rating agency expects the economy to contract 7 per cent, lower than its previous estimate of 10.6 per cent contraction.
Moody's Investors Service, while silent on the sovereign rating on the higher-than-expected fiscal deficit numbers, expressed doubts over attaining the higher revenue targets and divestment realisation as assumed in the Budget. The Union Budget 2021-22 has pegged a fiscal deficit of 9.5 per cent for the current financial year as against the consensus 7 per cent, and 6.8 per cent for 2021-22 with a market borrowing of around Rs 12 lakh crore. It also assumes Rs 1.75 lakh crore to be scooped up from divestment.
Moody's Investors Service on Thursday downgraded subordinated debt ratings of 11 Indian banks, including SBI, ICICI Bank and HDFC Bank.
Moody's, which cut its FY14 growth estimate to 4.5 per cent recently, said economic growth will be lowest in a decade.
Moody's said the government will face challenges in achieving its deficit target for the fiscal year ending March 2021, amid persistent structural and cyclical headwinds to growth.
As the clean-up has taken hold, loan growth slipped to 10.7 per cent in the last fiscal
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances