Moody's: GST, infra funding uphill climb

Moody's however has a 'positive' outlook on its 'Baa3' rating on India, which is just a notch above the junk grade

Implementation of the goods and services tax (GST) and bridging a large infrastructure deficit are a difficult task before the Indian government, Moody’s Investors Service said on Wednesday.

In a report, Moody’s said a history of double-digit inflation, elevated government debt, weak infrastructure and a complex regulatory regime had constrained India’s credit profile.

“We also expect some aspects of the government’s policy agenda — such as the implementation of

GST and bridging India’s large infrastructure deficit — will still face an uphill climb,” it said.

As a positive, Moody’s noted that easing of constraints on investment, coupled with the Reserve Bank of India’s inflation targeting and ongoing efforts to clean bank balance sheets could propel growth.

Moody’s has a ‘positive’ outlook on its ‘Baa3’ rating on India, which is just a notch above junk grade.