India budget tactical , not breakthrough , Moody s Ratings says

Moody’s Ratings described India’s federal budget as “tactical” but not a “breakthrough” in their response to the government’s plan for the upcoming financial year. The budget aims to reduce the fiscal gap from 4.4% to 4.3%, but this change will not affect India's credit profile, according to Christian de Guzman, senior vice president at Moody’s Ratings, in a statement to Reuters. Guzman noted that while India has a longer history of managing deficits and practicing fiscal discipline, the current deficit remains larger than it was before the Covid pandemic. He added, “We haven’t seen the fiscal metrics improve sufficiently enough to actually change the credit profile.” For the current financial year, the economy is expected to grow by 7.4%, with inflation projected to be around 2%. The fiscal deficit for this year is anticipated to be 4.4% of the gross domestic product. Last year, Moody’s Ratings confirmed its long-term local and foreign-currency sovereign ratings for India and maintained a “stable” outlook, citing the ongoing strength of its economy and dependable domestic funding for budget deficits.