India's policy reforms to affect sovereign ratings - S&P

MUMBAI Tue Apr 15, 2014 8:07pm IST

Labourers work at the construction site of an educational institute in Gujarat December 21, 2013. REUTERS/Amit Dave

Labourers work at the construction site of an educational institute in Gujarat December 21, 2013.

Credit: Reuters/Amit Dave

Related Topics

MUMBAI (Reuters) - The direction and pace of policy reforms in India, more than which political party takes control after elections, will have a bearing on the sovereign rating, said Standard and Poor's rating agency on Tuesday.

"An important factor is how fragmented the government will be. The more parties involved in the next coalition government, the more likely policies will be incoherent and less supportive of credit attributes," said Kim Eng Tan, sovereign credit analyst at S&P, in a statement.

The world's biggest-ever election is under way in India, Narendra Modi, the prime-ministerial candidate of the Bharatiya Janata Party (BJP), taking on the ailing ruling Congress party and several regional parties.

Most surveys predict BJP will win the biggest chunk of seats but fall shy of the halfway mark, forcing them to seek a coalition with the powerful regional parties. Voting runs until May 12 and results are due on May 16.

S&P has a BBB- rating on India with a negative outlook and has warned of the risks of a ratings downgrade in the absence of structural reforms, fiscal consolidation and if economic growth decelerates further.

(Reporting by Suvashree Dey Choudhury; Editing by Jacqueline Wong)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Bureaucrat Shunted

Reuters Showcase

Facebook Earnings

Facebook Earnings

Facebook tops Wall Street revenue target in 4th quarter.  Full Article 

Governance Reforms

Governance Reforms

IMF sets June deadline for progress on governance reforms.  Full Article 

Tackling Deficit

Tackling Deficit

Government makes push to boost revenue as deficit deadline nears.  Full Article 

Fed's Stance

Fed's Stance

Fed upbeat on U.S. economy, cites strong job gains.  Full Article 

Tumultuous Run

Tumultuous Run

McDonald's CEO Don Thompson leaving.  Full Article 

Samsung Results

Samsung Results

Samsung Elec's smartphone primacy under threat from Apple after weak Q4.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage