Food Bill a negative score: Moody's

Says the decision will push up the subsidy burden in a situation of fiscal strain

Moody's Investors Service, which had been maintaining a stable outlook on India's sovereign ratings even as its peers cut this to a negative one, has joined the vote against the food security legislation passed by the Lok Sabha earlier this week.

On Thursday, the rating agency said the decision would push up the subsidy burden in a situation of fiscal strain. Hence, the move was a credit-negative.

The government has been saying the proposed law will have only a marginal impact on the Centre's fiscal situation.

Moody's also attributed the sharp depreciation in the rupee against the dollar partly to the high current account deficit (CAD), adding this had been affected by the fiscal imbalance.