Fiscal Deficit: India could cut capex to meet target, says Moody’shttps://indianexpress.com/article/business/economy/fiscal-deficit-india-could-cut-capex-to-meet-target-says-moodys-5208743/

Fiscal Deficit: India could cut capex to meet target, says Moody’s

Moody’s had in November 2017 revised up India’s sovereign rating for the first time in around 14 years to Baa2 from the lowest investment-grade ranking of Baa3, with a stable outlook.

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It warned that any reduction in the excise duty on petroleum products would exert negative pressure on the country’s sovereign credit profile.

Moody’s Investors Service on Thursday said India could prune its capital expenditure to avoid any slippage of its fiscal deficit target of 3.3 per cent of GDP in the current fiscal, but warned any reduction in the excise duty on petroleum products would exert negative pressure on the country’s sovereign credit profile.

Moody’s had in November 2017 revised up India’s sovereign rating for the first time in around 14 years to Baa2 from the lowest investment-grade ranking of Baa3, with a stable outlook. “Although Moody’s sees some downside risk to budgeted revenue and expenditure targets, it expects that the government would cut back on planned capital expenditure, as has occurred in past years, if it is needed to offset any slippage from its fiscal targets,” Moody’s V-P and senior credit officer William Foster said. —FE