look news india
New Delhi: Global credit rating agencies have praised India's budget for the financial year 2024-25 and the government's commitment to reduce the deficit. Moody's Ratings has said that the budget is positive for credit. The government's capital expenditure on infrastructure is about 23 percent of the total expenditure, although it is less than the 24 percent spent on interest payments.
Overall, the budget is positive as it is expected to keep the fiscal deficit at around 4.9 per cent of gross domestic product (GDP), lower than the 5.1 per cent of GDP announced in the interim budget. This makes the government's target of achieving a deficit target of 4.5 per cent of GDP by FY 2025-26 seem possible.
S&P Global Ratings said India's budget is in line with our expectation of the government's commitment to reducing the fiscal deficit and the lower central deficit target is consistent with our forecast of a general government deficit of 7.9 per cent of GDP for FY25.
S&P revised India's sovereign credit outlook to positive from stable in May and retained its lowest investment grade rating. Moody's and Fitch Ratings said their outlook on India remained stable and the sovereign credit rating also remained stable.
Fitch Ratings said the country's credit profile on public finance metrics remains relatively poor, with the fiscal deficit, interest-income ratio and debt ratio still higher than many countries.
We will continue to assess the impact of the fiscal outlook on debt on a sequential basis over the medium term as a key factor in our ongoing monitoring of India's ratings.