Moody's Investor Service cut India's rating outlook to 'negative' from 'stable' citing rising risks to economic growth and rising debt burden. The rating agency downgraded the outlook and affirmed the sovereign ratings at 'Baa2' on Friday. A prolonged period of slower growth would dampen income growth and the pace of improvements in living standards. India's economy expanded only 5 percent in June quarter, the lowest in six years. The probability to sustain at or above 8 percent growth has diminished, Moody's said. Further, the rating agency said it does not expect the credit crunch among non-bank financial institutions to be resolved quickly.
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