India's rating outlook stable; deficit, inflation problems: Moody's

Moody's said its Baa3 rating on India is constrained by the credit challenges posed by the country's poor social and physical infrastructure, high government deficit and debt ratios, recurrent inflationary pressures and an uncertain operating environment

New Delhi: Ratings agency Moody's on Tuesday said India's credit outlook is stable but cautioned that high fiscal deficit and persistent inflationary pressure would continue to pose challenge for the economy, reports PTI.
The rating agency said that the 'Baa3' sovereign rating is supported by credit strengths which include a large, diverse economy, strong GDP growth as well as savings, and investment rates.
"The rating is constrained by the credit challenges posed by India's poor social and physical infrastructure, high government deficit and debt ratios, recurrent inflationary pressures and an uncertain operating environment," Moody's said in its 'Credit Analysis on India'.
The rating has also been constrained due to the country's "complex regulatory environment" and a tendency towards inflation, it said, adding that fiscal position has long been a constraint for rating.
The government aims to restrict the fiscal deficit to 5.3% of GDP this fiscal. It has also announced a slew of measures to spur infrastructure development and liberalised foreign direct investment norms.
"However, given the delayed timing and still modest scope of these measure, growth may remain subdued in the near term amid continued domestic political uncertainty and a global slowdown," Moody's added.
Moody's said persistent domestic inflation and wide fiscal deficits precluded domestic policy loosening to combat the global growth downturn over the last year.
The agency said its stable outlook on India's rating is based on "our expectations that India's structural strengths -- a high household savings rate and relatively competitive private sector -- will ultimately raise the GDP growth rate from around 5.4% in FY 2013 to 6 per cent or higher in FY 2014..."


MFIs should follow respectful method of loan recovery: FM

Chidambaram said the micro-finance institutions should adopt responsible financing by way of transparency and interest rate rationalisation and must follow respectful recovery procedure

New Delhi: The micro-finance institutions (MFIs) need to have a code of conduct and must follow 'respectful' methods for recovery of loans, Finance Minister P Chidambaram said on Tuesday, reports PTI.
"...responsible financing by way of transparency, interest rate rationalisation, respectful recovery procedure must be followed by micro finance institutions," he said while listing the challenges faced by MFI industry.
He was speaking at the Microfinance India Summit 2012.
MFIs in some states especially Andhra Pradesh faced problems on account of use of strong arm tactics for recovery of loans. This also resulted in suicide by some borrowers.
Chidambaram also asked MFIs to verify data on borrowers with credit bureau to avoid multiple borrowing or over indebtedness.
"I will request the micro finance sector to adapt itself to the expectation of public at large, especially, with regard to their code of conduct," he said.
He further said the proposed Micro Finance Institutions (Development and Regulation) Bill, 2012 will provide adequate legislative framework for development and regulation of the sector.
"We are hopeful that the Bill will be cleared by the Standing Committee, then brought to Parliament for passage.
Once the bill is passed, I hope that it will provide an adequate legislative framework for the entire gamut of micro-finance services," he said.
The legislation seeks to empower the Reserve Bank of India (RBI) to regulate the sector and fix interest rates caps on loans provided by them.
The Bill, which was drafted in the backdrop of problems faced by borrowers of MFIs in Andhra Pradesh and other states, also seeks compulsory registration of MFIs with the RBI.
Micro finance -- the business of doling out small loans at usually high interest rates to poor people who are unable to access conventional lending instruments -- has come under intense regulatory scrutiny in the wake of an Act passed by the Andhra Pradesh government.


Two senior police officers suspended, magistrate shifted in the Facebook arrest row

Maharashtra government has suspended Thane Rural's SP Ravindra Sengaonkar and senior police inspector Shrikant Pingle in the Facebook arrest case 

Mumbai: The Maharashtra government on Tuesday suspended two police officers, including a Superintendent of Police, following the row over the arrest of two girls from Palghar in neighbouring Thane district for a Facebook post on the shutdown in Mumbai for Balasaheb Thackeray's funeral, while the judicial magistrate who granted them bail was shunted out, reports PTI.

SP (Thane rural) Ravindra Sengaonkar and senior police inspector Shrikant Pingle have been suspended in the case, state's Home Minister RR Patil told reporters.

He said action has been taken after obtaining legal advice.

"There was no need to charge the girls under wrong sections," Patil said, adding that there was no need to take hasty action (against the girls).

The girls Shaheen Dhada and Rinu Shrinivasan, both 21, were arrested after Dhada had lamented in a Facebook post the 18th November shutdown due to Thackeray's funeral. Shrinivasan had 'liked' the post.

The home minister assured the departmental inquiry would be completed in the shortest possible time.

Patil said Additional SP Sangram Nishandar has been "warned in writing and reprimanded" for dereliction of duty.

"Wrong sections were applied against the girls. There was no need to take hasty action (against the girls)," Patil said.

He said senior officers will probe what charges could be dropped.

Earlier, the Bombay High Court transferred judicial magistrate RG Bagade who had granted bail to Shaheen Dhada and Renu Srinivasan, who were arrested last Monday after the former posted a Facebook status lamenting the 18th November shutdown and the latter "liked" it.

Though Dhada didn't name Thackeray, the local Sena leader complained against the girls and police arrested the duo on 19th November, sparing an outrage.

On 20th November, police arrested the vandals who had damaged Shaheen's uncle's hospital on 18th November, despite her removing the post and apologising that day itself.

The arrest had set off a debate with some legal experts maintaining that instead of enlarging the girls on bail, Bagade should have discharged them from the case as they had been booked under wrong sections.




4 years ago

I think the Bombay High Court has transferred the Magistrate for sending the girls to judicial custody. However, the Magistrate granted them bail later. High Courts decision is a welcome step.

Vaibhav Dhoka

4 years ago

Action on police is JUST and Right,but other department i.e judiciary known for inefficiency DELAYED and therefore DENIED justice for litigants,has as usual escaped without any punishment,a soft punishment in form of transfer.There is no dearth of such magistrates who sell Unlawful ORDERS grant bail on A price.Due to such orders higher courts are unnecessarily burdened.

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