Economy
High deficit, inflation limiting India's sovereign ratings, says Moody's
According to the ratings agency, while stronger growth will help counterbalance credit challenges for India, fiscal deficit, inflation and infrastructure metrics are limiting further upward momentum in the sovereign rating
 
Rating agency Moody's on Wednesday said high fiscal deficit and sticky inflation limit chances of an upward revision in India's sovereign ratings, despite positive growth figures achieved by the economy during the first quarter.
 
"We forecast fiscal (deficit), inflation and infrastructure metrics to remain weaker than the median for similarly rated peers. While stronger growth in this large and diverse economy will help counterbalance these credit challenges, they limit further upward momentum in the sovereign rating," Moody's Investors Service said in a note.
 
The comments from the ratings agency come days after the Indian government released first quarter gross domestic product (GDP) numbers at 5.7% and current account deficit (CAD) at 1.7% of GDP.
 
The Indian government has committed a fiscal deficit target of 4.1% for FY15, but has already exhausted over 61% of the fiscal's target during the first four months itself.
 
Inflation measured by consumer price index (CPI) continues to skirt around the 8% mark, with upward pressures being exerted by food prices due to weak monsoon.
 
Moody's, which has a 'Baa3' rating with a stable outlook on India, said the 5.7% GDP print in the April-June period is in line with its "long-held view that growth deceleration to sub-5% levels over the past two years would reverse over time."
 
The agency further said it is due to this view that it has maintained a "stable outlook" in spite of issues like currency volatility, declining private and public investments and poor market sentiment in the past two fiscals due to adverse tax policies of the previous regime.
 
Moody's said the higher growth numbers in Q1 will help improve tax revenues and capital flows into the country, and can also help reverse the weakening metrics that have occurred in the fiscal and external position in recent years.
 
Additionally, Moody's said the macroeconomic outlook will improve if the government is able to "implement policies that ease inflationary pressures and increase infrastructure investment".
 
The Finance Ministry has been meeting representatives from rating agencies since mid-August to project the positives about the country.
 
After the release of official data pointing to a 5.7% jump during the first quarter, coming after two consecutive fiscals of sub-5% growth, Finance Secretary Arvind Mayaram had said that he expects some positive action from the international rating agencies.

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Samsung, Philips, among others penalised by EU for forming cartel
The EU has fined Infineon, Philips and Samsung 138 million euros or about $181 million for forming a smartcard chip cartel in Europe
 
The European Union (EU) has fined Infineon, Philips and Samsung 138 million euros (about $181 million) for forming a smartcard chip cartel in Europe. 
 
According to the European Commission, the German, Dutch and South Korean companies “colluded through bilateral contacts that took place in the period between September 2003 and September 2005”. 
 
Japan’s Renesas was granted immunity for revealing the existence of the cartel, the statement from the Commission said. 

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Maharashtra panel calls for complete ban on dance bars
The Committee appointed by state government has recommended complete ban on dance bars and a policy to check social networking sites such as Facebook
 
The Justice CS Dharmadhikari Committee, set up to recommend measures to curb crimes against women, has asked Maharashtra Government to enforce a “complete ban” on dance bars and frame a policy to check “vulgarity” on social networking sites such as Facebook.
 
These suggestions by the state government-appointed panel are contained in its fourth and fifth interim reports submitted to the Bombay High Court on a public interest litigation (PIL) seeking measures to ensure safety and security of women.
 
The Committee, while recommending a complete ban on bar dance, has noted there was a drop in cases of atrocities against women when the state had banned dance bars.
 
“This committee is of the view that there should be a complete ban on bar dancers in hotels and restaurants. We recommend that a new law many be introduced after considering the suggestions given by the Supreme Court in its judgement.”
 
In 2012, the Supreme had held the ban on dance in bars as unconstitutional.
 
Maharashtra Assembly had on 13 June 2014 passed a Bill to extend the ban on dance performances at high-end hotels and a host of other public premises, bringing to end a protracted legal battle over the issue which had generated a heated debate on moral policing.
 
In 2005, in a controversial decision, dance performances in the bars in the state had been banned, but performances at three-star and higher-standard hotels had been exempted. The government could not defend this discrimination when the ban was challenged in the Supreme Court, which had called it discriminatory.
 
The committee also said that social networking sites such as Facebook are responsible for increase in divorce cases and harassment of women, besides developing violent tendencies among the youth.
 
“Vulgar activities on Facebook and such other social networking sites, mobiles and computers should be monitored and tackled urgently as it was observed the world over that divorce cases are on rise in marriages taking place through such medium.”
 
“Such sites fuel violent tendencies among the youths and as such there is increase in cases of crime against women,” the Dharmadhikari panel said in its report.
 
It said criminal tendencies among children are also increasing because of this and recommended that the state should a frame a policy in this regard.
 
Among the 22 recommendations in its fourth interim report and six suggestions in its fifth report submitted to HC by the government two days ago, the panel has advised that at the time of registration of marriage, the bride must be asked to disclose on oath whether dowry was demanded and that all the laws for protection of women were followed.
 
“Also, the bride must declare whether all gifts and cash received by her were kept in her name by the family,” the committee said.
 
These measures would go a long way in making the anti-dowry law more effective, the panel, which was set up in 2010, said. 

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