Election Results 2019: Credit View On India Hinges On Policies Of New Government, Says Moody’s

Moody's said its credit view on India will depend on policies of the new government and expressed hope that the country would continue with its fiscal consolidation plan.

"Any credit implications of the outcome of India's general election will be determined by the policies adopted by the government in the next few years. These policies are yet to be formulated," Moody's Investors Service VP Sovereign Risk Group William Foster said.

Moody's expects the broad push towards fiscal consolidation to remain, although with greater policy emphasis on supporting low incomes, Foster added.

As per the trend, Bharatiya Janata Party-led National Democratic Alliance will form the government at the Centre for the second successive term with absolute majority.

In 2017, the U.S.-based rating agency upped India's rating to 'Baa2' from 'Baa3', changing outlook to 'stable' from 'positive', and said reforms would help stabilise rising levels of debt.

Deviating from the fiscal consolidation path as per the Fiscal Responsibility and Budget Management Act, the government in February's interim budget pegged the fiscal deficit for 2019-20 at 3.4 percent of GDP, as against the original target of 3.1 percent.

In 2018-19, the fiscal deficit was 3.4 percent of GDP.