Decisive Poll Results Positive For India's Ratings: Moody's


NEW DELHI:  A landslide victory for Narendra Modi-led Bharatiya Janata Party (BJP) in the just concluded general election is “credit positive” for India's sovereign profile as well as corporate sector, ratings agency Moody's said.

In a report related to credit outlook, Moody's said the new government's strong mandate, which shows an overwhelming majority of 334 seats in 543-member Lok Sabha or lower house of parliament, for the BJP-led National Democratic Alliance (NDA), “increases the possibility of a stable central government that will pursue a shared economic agenda to address India's macroeconomic challenges.”

From a broad sovereign perspective, the results of the election announced May 16, will have the immediate effect of sustaining investor sentiment, which has also recently boosted India's equity indices and the rupee, Moody's said.

“Moody's also considers that 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,” Vikas Halan, vice president and senior credit officer of Moody's, said in the report.

Moody's observations were made in the report, titled “India's Decisive Election Outcome Is Credit Positive" as part of Moody's Credit Outlook.

“Moody's notes that India raised diesel prices immediately after the voting, the first such move since the previous government halted regular price increases in March, and we expect further price hikes in the months ahead," Halan said.

Such price rises will be credit positive for oil marketing companies as they will reduce spending on fuel subsidies and lower these companies' borrowing requirements.

Source: IANS