oppn parties Downgrading By Moody's: Somewhat Pessimistic

News Snippets

  • 2nd ODI: Rohit Sharma roars back to form with a scintillating ton as India beat England by 4 wickets in a high scoring match in Cuttack
  • Supreme Court will appoint an observer for the mayoral poll in Chandigarh
  • Government makes it compulsory for plastic carry bag makers to put a QR or barcode with their details on such bags
  • GBS outbreak in Pune leaves 73 ill with 14 on ventilator. GBS is a rare but treatable autoimmune disease
  • Madhya Pradesh government banned sale and consumption of liquor at 19 religious sites including Ujjain and Chitrakoot
  • Odisha emerges at the top in the fiscal health report of states while Haryana is at the bottom
  • JSW Steel net profit takes a massive hit of 70% in Q3
  • Tatas buy 60% stake in Pegatron, the contractor making iPhone's in India
  • Stocks return to negative zone - Sensex sheds 329 points to 76190 and Nifty loses 113 points to 23092
  • Bumrah, Jadeja and Yashasvi Jaiswal make the ICC Test team of the year even as no Indian found a place in the ODI squad
  • India take on England in the second T20 today at Chennai. They lead the 5-match series 1-0
  • Ravindra Jadeja excels in Ranji Trophy, takes 12 wickets in the match as Saurashtra beat Delhi by 10 wickets. All other Team India stars disappoint in the national tournament
  • Madhya Pradesh HC says collectors must not apply NSA "under political pressure and without application of mind"
  • Oxfam charged by CBI over violation of FCRA
  • Indian students in the US have started quitting part-time jobs (which are not legally allowed as per visa rules) over fears of deportation
Manipur Chief Minister Biren Singh resigns after meeting Home Minister Amit Shah and BJP chief J P Nadda /////// President's Rule likely in Manipur
oppn parties
Downgrading By Moody's: Somewhat Pessimistic

By A Special Correspondent

With the Indian economy showing signs of a prolonged slowdown and with the government responding extremely slowly and with small measures, one cannot fault Moody's for downgrading India's rating from "stable" to "negative". But having said this, the fundamentals of the economy are quite strong in the medium term and beyond and this rating will have to be revised soon. The present state of the Indian economy must also be seen in the context of the slowdown being seen in all major economies of the world.

The slowdown in India is driven by a near absence of demand. It is not as if people are not earning. But the gloomy outlook has made them wary about the future and they are postponing buying decisions. This situation is not going to change until the government invests heavily in infrastructure to put money in the market. The cascading effect will benefit all sectors, lifting the sentiment. But the government simply does not have the money. Hence, it should divest in state-owned enterprises like the loss-making Air India and others and think of other methods of raising revenues.

The government has been taking steps to improve the ease of doing business. It has lowered corporate taxes to make them competitive with other countries.  Inflation is low, fiscal deficit has been kept in check and the current account deficit is not showing an alarming rise. These are positive factors. It has also taken major steps to revive the real estate sector by floating a fund to complete incomplete projects.

But the government has the mandate to push for structural reforms. It has been acting too slowly, often giving the impression of carrying out knee-jerk responses to crisis situations. This has to change. It has to bring the banking sector back in line, fix realistic charges for utilities like power to make the sector get better realizations and become viable. It has to work to create a market for debt instruments in India. It has to further cut red tape and make doing business easier. Structural reforms are the need of the hour. The government must not delay taking decisions in this regard.