By 07 July, 2009

Ratings agency Moody's Investors Service said on Tuesday that India's budget for 2009/10 is consistent with a stable outlook on its sovereign ratings, although it said the commitment to cut a debt overhang was weak.

"This is clearly a growth-oriented budget and contains a slightly larger than expected headline deficit number, but it is broadly consistent with near-term stability in the government's debt trajectory," Aninda Mitra, a senior analyst at Moody's, said in an email to Reuters.

Moody's has a Baa3 foreign currency rating and Ba2 local currency sovereign rating, which is non-investment grade, on India.

The budget estimated the fiscal deficit would widen to 6.8 percent of gross domestic product, its highest in 16 years, in the fiscal year ending in March 2010 from 6.2 percent in the last fiscal year.

 

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