Moody's Investors Service sees India's economic growth at zero' in FY21
Mumbai: Moody's Investors Service on Friday said it estimates India's GDP growth to hit zero' in FY21 and pointed to a wide fiscal deficit, high government debt, weak social and physical infrastructure, and a fragile financial sector.
The quality of India's economic growth has declined in recent years, demonstrated by financial stress among rural households, relatively low productivity and weak job creation, the agency said.
In its forecast for FY21, the agency estimated India's gross domestic product (GDP) growth at zero, meaning the country's economic growth will remain flat this financial year, and the same is seen accelerating to 6.6 per cent in FY22.
In its credit opinion which comes following the change in the forecast, Moody's warned that the COVID-19 "shock will exacerbate an already material slowdown in economic growth, which has significantly reduced prospects for durable fiscal consolidation".
Analysts across the board have been certain about the heavy economic toll that the pandemic will take on the country.
Moody's local arm Icra has pegged for a contraction of up to 2 per cent in the growth as a result of the crisis, which has seen the country being put under a lockdown for nearly two months to arrest the spread of infections.
Late last month, Moody's had slashed its calendar year 2020 GDP growth forecast to 0.2 per cent.
Its negative outlook on the sovereign rating, which was revised last in November 2019 from stable', reflects increasing risks that economic growth will remain significantly lower than in the past, it said, adding that this takes into account the deep shock triggered by the virus outbreak.
Meanwhile, India's credit strengths include a large and diverse economy, favourable demographic potential and a stable domestic financing base to fund the government debt, it noted.
In March, the government had announced a relief package worth Rs 1.7 lakh crore, and there are speculations of another follow-up package in the offing.
These measures will reduce the depth and duration of India's growth slowdown, but there is a probability of an "entrenched weakening" on prolonged financial stress among rural households, weak job creation and a credit crunch among non-bank financial institutions, it said.
Reform prospects, which can take care of some of the concerns with the Indian economy, have "diminished", the agency said.
It further warned that a downgrade in the rating could happen if the fiscal metrics weakened materially, and made it clear that a "negative" outlook indicates that an upgrade in the rating is unlikely in the near term.
However, the outlook can be changed to "stable" if the fiscal metrics stabilise, it added.
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Delhi Polls: BJP faces protest, placates MLA amid resentment over ticket distribution
New Delhi, Jan 12: Resentment surfaced in the BJP on Sunday over ticket distribution for Delhi Assembly polls, with a protest held outside its Delhi unit office and an angry outburst by the outgoing MLA from Karawal Nagar who was not included in the candidate list released a day earlier.
As MLA Mohan Singh Bisht threatened to revolt after being denied a ticket from Karawal Nagar, the party rushed to control the damage and announced his candidature from the Mustafabad seat this evening.
A group of protesters from Tughlakabad in South Delhi held a dharna at the gate of the Delhi BJP office, demanding a change in the candidate from the constituency.
"Vikram Bidhuri Tum Sangharsh Karo; Modi Se Bair Nahi, Rohtas Teri Khair Nahi," the protesters, including mostly youngsters, chanted as the party leaders tried to pacify them.
In the second list of BJP candidates for the polls declared on Saturday, Rohtas Bidhuri was fielded from the Tughlakabad seat. In 2020 Assembly polls, Vikram Bidhuri who is a relative of senior party leader Ramesh Bidhuri, lost to AAP's Sahiram by over 13,000 votes.
A similar protest was also held by some party workers outside the Delhi BJP office against Mehrauli candidate Gajainder Yadav after the announcement of the first list of candidates earlier this month.
Bisht, the senior-most BJP MLA in the outgoing Assembly elected five times from Karawal Nagar, openly expressed unhappiness over being denied the ticket to contest from his stronghold.
A senior party leader said he was pacified after a meeting with BJP chief JP Nadda.
Bisht, after getting the ticket from Mustafabad, expressed confidence that he would win the seat for the BJP.
"I met the national president and things were ironed out. I have assured that I will contest from Mustafabad and win the seat for the party," Bisht told PTI.
The MLA said he and the BJP had considerable support in Mustafabad and he has already attended two public meetings there.
The BJP won the Mustafabad seat, having a significant minority community presence, in the 2015 Assembly polls but lost it to Aam Aadmi Party (AAP) in 2020.
Earlier in the day, Bisht told PTI that the party's decision to replace him with Kapil Mishra was "wrong" and its consequences will be visible after voting on February 5.
"You have challenged the 'samaj' (his Uttarakhandi community), not Mohan Singh Bisht. The BJP will lose at least 8-10 seats because of this decision, including Karawal Nagar, Burari, Mustafabad and Gokalpuri," Bisht warned.
The BJP fielded Kapil Mishra, a Hindutva hardliner, from Karwal Nagar in North East Delhi, which was rocked by massive communal violence just after the 2020 Assembly polls.
Sources in the party claimed that there was also "deep resentment" among the Delhi BJP's Scheduled Castes Morcha leaders over being denied tickets from different constituencies including Madipur and Kondli.
A top Delhi BJP functionary stressed that there are many ticket aspirants, so it is natural for those who did not get selected to feel disappointed.
"The BJP is a disciplined party and its leaders understand this. Sooner or later, everyone will realise this and work for the victory of the party giving up their resentment," he said.
The elections to 70 Assembly seats in Delhi are scheduled on February 5. Results will be out after the counting of votes on February 8.
The BJP, out of power in Delhi since 1998, is making all-out efforts to return to power. In the 2015 and 2020 Assembly polls, the party was completely routed by the AAP, scraping through with just three and eight seats, respectively.
