Moody’s, a global ratings agency, has said that India’s rating can be upgraded only if evidence emerge in the coming months that efforts to enhance growth and stabilise economic and institutional reforms are succeeding. However, there will be a downgrade, its release said, if economic, fiscal and institutional strengthening appears unlikely, or banking system metrics remain weak or balance of payments risks rises.
Chief Economic Adviser Arvind Subramanian said that the focus of the government was on what was required to improve growth and that the inflation target of 5 per cent to 5.5 per cent by the year-end would not be breached as unseasonal rains that had resulted in crop damage would be a “temporary blip” on food prices. Finance Minister Arun Jaitley tweeted: “The upgrade in outlook is significant but we have to do more.”
