INSUBCONTINENT EXCLUSIVE:
lower deficit target in the full Budget 2019-20.In its analysis of the full Budget 2019-20, Moody's said that weak growth prospects for
India will complicate the government's fiscal consolidation efforts, weighing on the sovereign credit quality."Simultaneously delivering
on fiscal consolidation and raising incomes will be extremely challenging for India's authorities, particularly since growth is likely to
remain weak over the coming year," the credit rating agency said.The full Budget presented on July 5 targeted a slightly lower deficit of
3.3 per cent of the GDP for fiscal 2019 than what the authorities had predicted in February.As per the report, budget announcements for
public sector banks, non-bank finance companies (NBFCs), the infrastructure sector, property developers, some domestic producers and
securitisation transactions are credit positive.Specifically, the report pointed out the Rs 70,000 crore ($10.2 billion) capital infusion
into public sector banks and a temporary credit guarantee facility to alleviate tight liquidity for NBFCs as credit-positive for the
relevant entities and "should encourage the flow of credit to the economy and support growth"."The hike in customs duties on certain
imported products will increase the competitiveness of domestic producers, while new incentives for the purchase of affordable homes will be
credit positive for Indian property developers," the agency said."And, plans to increase public spending on infrastructure and expand
funding sources to these companies are credit positive for the sector."As for the funding support and regulatory strengthening for the NBFC
sector, the report elaborated that such measures are credit positive for Indian securitisation deals."However, any reductions in the
government's stakes in oil companies could lower Moody's assessment of official support for these firms, a credit negative for the
sector," the report said.Get Breaking news, live coverage, and Latest News from India and around the world on TheIndianSubcontinent.com
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