Budget To Boost Growth: Moody’s


New Delhi: India’s Budget 2021-22 provides for pro-growth measures that will support credit quality across sectors in the near term, but at the expense of fiscal consolidation, a report by Moody’s Investors Service said.

The budget calls for a narrowing of the Centre’s fiscal deficit to 6.8 per cent of GDP in FY22 from an estimated 9.5 per cent in FY21.

“While the headline deficit projections are larger than we expected, they reflect both credible budgetary assumptions and greater transparency than in past budgets,” said William Foster, a Moody’s Vice President and Senior Credit Officer.

“The budget’s focus on higher capital spending, financial sector reform and asset sales will help stimulate growth, but implementation risks remain and slower fiscal consolidation will constrain fiscal strength over the medium term,” the agency said.