The fundamentals of Indian economy remains robust with inflation under check and bond yields low, the finance ministry said in a statement, in response to Moody’s Investors Service lowering the outlook on India's rating. "India continues to offer strong prospects of growth in near and medium term," the finance ministry added.
Moody's cited increasing risks that growth in Asia's third-largest economy will remain lower than in the past for lowering its outlook. The ratings agency however retained India's foreign and local currency ratings at 'Baa2'.
India's economic growth fell to 5.0% year-on-year in the June quarter, the slowest since 2013. "While government measures to support the economy should help to reduce the depth and duration of India's growth slowdown, prolonged financial stress among rural households, weak job creation, and, more recently, a credit crunch among non-bank financial institutions have increased the probability of a more entrenched slowdown," Moody's said.
The finance ministry said that the government has undertaken series of financial sector and other reforms to strengthen the economy as a whole. "Government of India has also proactively taken policy decisions in response to the global slowdown. These measures would lead to a positive outlook on India and would attract capital flows and stimulate investments," it added.
The ministry also reiterated that India continues to be among the fastest growing major economies in the world and "India’s relative standing remains unaffected".
"IMF in their latest World Economic Outlook has stated that Indian Economy is set to grow at 6.1% in 2019, picking up to 7 % in 2020. As India’s potential growth rate remains unchanged, assessment by IMF and other multilateral organizations continue to underline a positive outlook on India," the finance ministry said.
Stock market index Sensex today about 100 points in early trade.