MUMBAI (Reuters) - India’s 2018/19 budget is in line with the government’s fiscal consolidation path, a Moody’s analyst said on Thursday, adding that it reinforced the credit ratings agency’s recent rating upgrade for the country.
In his budget statement to parliament, Finance Minister Arun Jaitley set the fiscal deficit for 2019/19 (April-March) at 3.3 percent of gross domestic product, slightly higher than expectations for 3.2 percent.
Most of the spending announced seemed to be on “productive investments” rather than ‘one-time hand outs’, said Joy Rankothge, Vice President of Moody’s Investors Service told Reuters.
“You’ll see more medium-long term benefits, again depending on how it’s implemented and how it’s funded,” he said.
Moody’s Investors Service upgraded India’s sovereign credit rating for the first time in nearly 14 years in November, saying continued progress on economic and institutional reforms would boost the country’s growth potential.
Moody’s rates India at “Baa2” with a “stable” outlook.
Reporting by Abhirup Roy; Editing by Simon Cameron-Moore