Moody's says change the mood

PM Narendra Modi must keep “his party members in check“ from making controversial statements “or risk losing domestic and global credibility“, an arm of global ratings agency Moody's has said while urging the government to focus its attention on the reforms agenda. “In recent times, the government also hasn't helped itself, with controversial comments from BJP members. While Modi has largely distanced himself from the nationalist gibes, the belligerent provocation of various Indian minorities has raised ethnic tensions,“ Moody's Analytics said.
“Along with a possible increase in violence, the government will face stiffer opposition in the Upper House as debate turns away from economic policy,“ MA said. The NDA 's lack of a majority in the RS has proved a major stumbling block to reforms. The report commented that the pace of reforms is likely to be dictated by politics in the months ahead. Overall, it's unclear whether India can deliver the promised reforms and hit its growth potential. Undoubtedly, numerous political outcomes will dictate the extent of success,“ says a report by Moody's Analytics, adding that the state election in Bihar could prove pivotal to Modi's leadership.
“External headwinds are blowing stronger, and the government has failed to deliver promised reforms. For 2016 GDP growth is estimated at 7.6% and key economic reforms could deliver greater potential GDP, as they would improve India's productive capacity . These include the land acquisition bill, a national goods and service tax, and revamped labour laws. They are unlikely to pass through parliament in 2015, but there is an even chance of success in 2016,“ Moody's said.
Multilateral agencies and economists have raised doubts about the pace of economic reforms and have urged the government to accelerate the momentum for long-term growth. Globally India is seen as a bright spo but the difficulty faced by the BJP government to get key reforms such as GST implemented have stoked investor worries.

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