News Column


July 11, 2014

Lack of specifics on how Union finance minister Arun Jaitley will manage to rein in the fiscal deficit at what his predecessor P. Chidambaram promisedó 4.1 per cent of GDPó has rating agencies Moody's and Fitch in a spot of bother. While Moody's Investors Service welcomed Jaitley's pledge to keep government finances in check, it said that the lack of details on how to narrow the fiscal deficit makes it challenging to assess the credit impact.

"From a ratings perspective, it is mildly positive to see there's a road map, but the lack of details gives us pause," Moody's sovereign rating analyst Atsi Sheth said. Fitch Ratings said that implementation will be key and noted it is unsure how the fiscal deficit target could be achieved without revenue increases or spending cuts.

S& P said that the Budget had adopted a "cautious" approach in tackling some of economy's structural weaknesses.

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Source: Mail Today (India)

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