Moody's rates India 'Baa3', the lowest investment-grade with a 'stable' outlook

  • Reuters, Mumbai
  • Updated: May 19, 2014 13:45 IST

The Bharatiya Janata Party's resounding election win is credit positive for India as it boosts the prospect that a stable government will address the country's economic challenges, Moody's investor service said on Monday.

Moody's rates India "Baa3", the lowest investment-grade rating with a "stable" outlook.

"The completion of the election will allow stalled policies relating to the corporate and infrastructure sectors to resume, a credit positive for the country's corporates," said Vikas Halan, vice president and senior credit officer at Moody's, said in a statement.

Rival rating agency Standard & Poor's also rates India at the lowest investment grade, but with a "negative" outlook. Investors are increasingly betting on a turnaround in the Indian economy after the Narendra Modi-led BJP and its allies won a more decisive-than-expected 334 seats in India's 543-member lower house in vote counting on Friday.

"Closer co-ordination between the central and state governments on clearances for mega projects and land use, two proposals outlined in the BJP's manifesto, would address investment delays," Halan wrote.

India's economy is growing at less than 5%, its slowest in a decade.

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