Economy
Growth potential, savings support India's credit profile: Moody's
Global credit rating agency Moody's Investors Service on Monday said India's credit profile is supported by its strong growth potential, high private savings enabling access to funds for the government at favourable terms.
 
On the other hand Moody's said these credit strengths were balanced against high government debt -- 67.4% of gross domestic product -- regulatory and infrastructure constraints, slow pace of reform and the contingent liability risk to the sovereign from public sector banks' high and rising non-performing loans.
 
"Over the past year, external developments favourable to India such as lower global oil prices have combined with policy measures -- including tighter or less accommodative fiscal and monetary policies than in the past -- to move the economy towards a more stable macroeconomic development with smaller fiscal deficits, lower inflation and a narrower current account deficit," Moody's said in its annual credit analysis of India.
 
However, one short-term consequence of the policy setting, combined with two successive unfavourable monsoon last year and the year before, has been relatively moderate nominal GDP growth, the agency added.
 
Moody's expects corporates' profitability to remain muted which will continue to dampen their ability and willingness to invest in the next few quarters.
 
"We forecast real GDP growth at around 7.5% in the next two years. In nominal terms, we do not expect GDP growth to rise above 10% until FY2017," Moody's said.
 
According to Moody's, sustained fiscal consolidation, stable inflation at moderate levels and progress on reforms aimed at enhancing the business environment would contribute to sustained growth at robust levels.
 
In turn, persistent income and profit growth would raise government revenues and contribute to improved fiscal metrics.
 
While India has institutional strength of checks and balances there are offsetting weaknesses like an uncertain regulatory environment, corruption, a slow-moving judicial system and, in general, inefficiencies in the delivery of government services.
 
Moody's said political fragmentation leads to slow and ad-hoc progress on reforms. Progress on land and labour reforms, when it has occurred has been limited and gradual.
 
According to Moody's India's Susceptibility to Event Risk is driven by banking sector risk.
 
As banks continue to recognise bad assets, non-performing loans will rise further, particularly for public sector banks, albeit at a slower pace than at the end of 2015.
 
The focus on bad asset recognition and provisioning in the banking system as well as the recent passage of a new bankruptcy bill would be credit positive from a sovereign perspective, if it led to improved bank capitalisation levels, renewed loan growth and robust risk processes, Moody's said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

Urjit Patel is the new governor of RBI
The government on Saturday appointed eminent economist, consultant and banker Dr Urjit Patel as new governor of the Reserve Bank of India (RBI). He will replace Dr Raghuram Rajan. 
 
Dr Patel was Deputy Governor of RBI looking after monetary policy, economic policy research, statistics and information management, deposit insurance, communication and right to information. 
 
On 11 January 2013, Dr Patel was appointed as Deputy Governor of RBI for a period of three years. He took over charge of the vital Monetary Policy Department, succeeding Subir Gokarn to the post.
 
Dr Patel obtained his BA from the London School of Economics [LSE, University of London], M Phil degree from Oxford University in 1986. He received his doctorate in Economics from Yale University in 1990. He joined International Monetary Fund (IMF) as a Kenyan citizen. He was at IMF India desk during the 1991-1994 transition period. He was posted to IMF country mission in India 1992-1995. He has also been a non-resident Senior Fellow at the Brookings Institution since 2009.
 

User

COMMENTS

MG Warrier

9 months ago

The decision to appoint Urjit Patel as 24th RBI Governor will be welcomed by all including the outgoing Governor Dr Raghuram Rajan, who was visibly concerned during recent weeks, about unfinished work he would be leaving for his successor. As Patel was associated with most of the policy pushes Rajan initiated, there is no immediate risk of a diversion under pressure from any quarters.
Though 3 years is too short a period, the history of RBI for the current period, when it is written, will have a lot to cover under ‘Rajan Era’. Here, there is an advantage arising from Dr Rajan’s innocence and outspokenness (which, in a way cut short his stay at Mint Road!) for those who will be recording the history. They do not have to wait for Rajan to write his memoirs. They can as well scan the speeches made and interviews given by him during the three years.
One regret. GOI has again gone by a wrong template while appointing RBI Governor. The appointment this time should have been for 5 years’ tenure in the first place. Of course, it would be tough to ignore political pressures at every stage.
In a lighter vein, one is tempted to console Subramanian Swamy that his accusation that Dr Rajan did not study economics at undergraduate level has been taken into account in making a choice as Urjit Patel went for higher studies after graduation in economics!
M G Warrier, Mumbai

Ashok Visvanathan

9 months ago

Is Urjit Patel also a green card holder ?

REPLY

Suketu Shah

In Reply to Ashok Visvanathan 9 months ago

mainly is he prodigy of PC like American Rajan was?

Celebrate Janmashtami without breaking the vertebrae!
It is indeed a welcome verdict by the Supreme Court with respect to the Dahi Handi celebrations: No youngsters below the age of 18 years and the human pyramids not more than 20 feet in height!
Applause. Applause.
 
At our non-governmental organization (NGO), Nina Foundation, we get calls on our HELPLINE for rehabilitation of friends with spinal cord injury. The second highest cause for this after road traffic accidents is falls due to various reasons, and dahi handi celebrations during Janmashtami is one of them. 
 
The challenge is as to how the Supreme Court ruling would be implemented. There are various groups which lure mostly uneducated and illiterate youth (though paid a paltry sum) individually. These groups are registered but what about the team, which travels from one location to another?
 
DahiHandi, Janmashtami,
 
1) It should be made mandatory that the birth certificates and photographs with residential proof be collected and filed with more than one mobile number (parents/ relatives).  The entire details of all participants should be deposited at the respective ward officers of BrihanMumbai Municipal Corp (BMC) and also specific dahi handi pandals, which they have been assigned to attempt and break. Designated officers to read through this list and check the age authenticity of all participants. 
 
2) Before attempting, the specific dahi handi pandal-in-charge should verify every participant, and cross- check with the file. 
 
3) Each participant should also have an ID card around him. This is as far as age is concerned.          
 
4) Each participant should go through a specific duration of training for the freestyle human pyramid. Each should have a certificate of having been through this course. Many join without any prior rehearsal or training.
 
5) Dahi Handi must be categorised as adventure sport and all safety equipment should be used. Helmets, lumbar jackets and harness. At every attempt, the participants fall down a couple of times and not realising that spinal cord injury is permanent and very expensive. (World Health Organization has mentioned spinal cord injury as the most devastating disability in the world.) Many such patients die due to complications like bed sore and respiratory issues or urine infection.
 
6) At the Dahi Handi Pandal venue, breath analysers should be administered to check that they have not consumed alcohol. In a drunk condition, climbing on human shoulders, they are unstable and have no balance control. Falls are thus inevitable and severe injuries are likely.
 
7) Falling form a height on their backs or heads on the hard ground (mostly tar roads) causes serious injuries, which are irreversible. It should be made mandatory that a paramedic team is assigned to each mandal with a scoop stretcher and an ambulance ready. Dahi Handi’s fun has turned into wails and cries many a times. With the amount of money that most pandals claim to ‘Gift’ as ‘Prize Money’, the above are some precautionary measures worth investing in for truly a joyous celebration of Lord Krishna’s birth.
 
8) In the event that the young participant falls and has a spinal cord injury, head injury or fractures, then complete medical and rehabilitation compensation in total should be borne by the organising Dahi Handi group. This undertaking should be given in writing to each and every participant. The life care expense of living with a spinal cord injury is humongous – quadriplegia- Rs5 lakh month and paraplegia- Rs2 lakh a month. Rehabilitation expenses are separate.
 
 

User

COMMENTS

Sraboni Sengupta

9 months ago

The verdict is truly the need of the hour. The celebration should be celebration and not a run for money and popularization of some political party/individuals. Some of the spinal injuries are fatal & has an impact not only on the person's life but on the entire family.

Pratap Hirji Chande

9 months ago

It is the need of the hour.If the rule is not followed or higher then the presribed height just dial 100 and within minutes the police will be there to stop illegal dahi handi organisers.

Jagrati

9 months ago

Can you please publish link for supporting data?

Param

9 months ago

i think the root cause of the issue needs to be addressed first - too many people with too little to do who are willing to risk their life for a chance at fame & money. i wonder how many would participate if most of them had a decent job & something more fruitful to do with their lives. but then again, india being what it is, anything goes in the name of religion...

Chandragupta Acharya

9 months ago

Complete rubbish. The only regulation that is acceptable is not to force minors into this risk.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)