Amidst the controversial banning of beef and reports of rising intolerance and growing assault on free speech in the country, Moody’s Analytics today cautioned the Narendra Modi government that India might lose domestic and global credibility if he fails to rein in controversial party members.
In a report titled India Outlook: Searching for Potential, Moody’s Analytics, the research and analysis arm of Moody’s Corporation, said for the country to meet its true potential the government has to deliver the promised reforms. “Undoubtedly, numerous political outcomes will dictate the extent of success,” it said.
Modi is under pressure to distance himself from incendiary communalist remarks. With Congress having more seats than BJP in Rajya Sabha, it is feared that debate may turn away from economic policy and scuttle economic reforms.
“Key economic reforms could deliver greater potential GDP, as they would improve India’s productive capacity. These include the land acquisition bill, a national goods and service tax, and revamped labor laws. They are unlikely to pass through Parliament in 2015, but there is an even chance of success in 2016,” Moody’s said.
With regard to the impending rate hike in the U.S., Moody’s said that the rupee will likely come out relatively unscathed due to bulging foreign exchange reserves stockpile.
The material has been provided by InstaForex Company – www.instaforex.com