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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Batumi (Georgia), Jul 26 (PTI): Young Indian International Master Divya Deshmukh held her nerves to hold stalwart Koneru Humpy to a draw in game 1 of the FIDE Women's World Cup final, with both players having their share of opportunities to take the lead here on Saturday.
The draw with black means Humpy, the two-time World Rapid champion, holds a slight edge going in the second and final game under the classical chess rules in the two-game mini-match, and should the deadlock continue, games of shorter duration will be played to determine the winner.
Humpy employed the Queen's gambit accepted as black and it turned out to be a pretty fascinating game right out of the opening as Divya, 19, came up with a piece sacrifice early to deny the black king the right to castle.
Humpy was the first to err and, according to computers, Divya had things under control on the 14th move. However in her bid to recover the extra material, the Nagpur girl, who has secured a place in the Candidates tournament with her sterling performance here, missed a promising continuation.
What followed the exchange of all minor pieces and the ensuing queen and rook endgame gave enough counter play to both players. The game was eventually drawn after Humpy sacrificed her rook to force perpetual checks.
"The game saw an extremely sharp battle with the game ending in a draw in 41 moves. On move 7, Divya made her aggressive intentions clear by offering another pawn,
which looked like home preparation. Humpy made a practical decision of refraining from taking the pawn and a balanced position was reached by move 10 by white," said Grandmaster Pravin Thipsay, an Arjuna awardee and the first Indian to get a chess Grandmaster norm.
"However, instead of developing the undeveloped Knight, Humpy retreated the centralised Knight on move 10, giving huge positional advantage to Divya. Divya could have gained huge positional advantage on the 12th move by moving a rook. However, she chose to play for King side attack by sacrificing a piece instead.
"Humpy, too, erred at this stage and instead of moving the King to Queen side, moved it to the King side. Divya, on move 14, could have obtained a crushing attack by threatening a mate by developing her Queen. Instead she chose to exchange a pair of Bishops first, which enabled Humpy to defend her King by returning the piece," said Thipsay.
"Players thus reached a balanced Queen and two Rooks ending. Divya continued to play ambitiously and tried to attack Humpy’s King but the latter defended accurately and the game was drawn in 41 moves by perpetual check," he added.
In the play-off for the third place, Chinese players Zhongyi Tan, the former women's world champion and top seed Lei Tingjie also decided to split points out of a Queen’s gambit declined game.
The opening raised visions of a close contest between the two but having been knocked out of title race in the previous round, none of them wanted to take any huge risk. It was still a middle game when the players shook hands.
With the top two positions sealed for the Indians, the berth to the next Candidates is also assigned, while the player finishing third will also get an entry to the premier event scheduled for 2026.
Results: Divya Deshmukh (Ind) drew with Koneru Humpy (Ind); Zhongyi Tan (Chn) drew with Tingjie Lei (Chn).