The Indian economy has solid foundations, will revive the reforms adopted by the government: India Inc

New Delhi, November 8 () India's economy has solid foundations and will revive due to the various reform measures adopted by the government, industry players said Friday, after Moody's Investors Service reduced the credit rating outlook from the country to negative.

In a blow to India, Moody's Investors Service reduced the country's credit rating outlook to negative, the first step toward a downgrade, saying that the government has been partly ineffective in addressing economic weakness, leading to an increase in the risks of growth being lower.

With its solid foundations, India is handling the effects of the global slowdown with measures resolved in a number of sectors, in addition to undertaking structural reforms in taxes, banking, finance and, therefore, the change in India's ratings by the Moody's Investor Service to 'negative' of 'stable' is incomplete in its evaluation, said Assocham president BK Goenka.

We at India Inc., fully share the optimistic perspective of Finance Minister Nirmala Sitharaman on the Indian economy, with inflation that remains low and the current account situation is still quite strong, said Goenka.

D K Aggarwal, president of the Chamber of Commerce and Industry of PHD, said the economy will recover strongly in 2020 with a growth rate of more than 7 percent.

We believe that the government has undertaken several reform measures in recent times to revive the economy, which are expected to give fruitful results in the future, Aggarwal said.

He added that a significant cut in corporate tax for national companies will accelerate manufacturing investments, open up new employment opportunities and accelerate the country's economic growth trajectory.

DBS Bank senior vice president and economist, Radhika Rao, said Moody's change in perspective reflects concerns about growth prospects and anticipated fiscal slippage.

If fiscal consolidation is demonstrated through prudent spending and higher revenues through privatization receipts, along with a broader tax base, these concerns will dissipate, Rao said.

The MD and CEO of Motilal Oswal Financial Services, Motilal Oswal, said that the long-term fundamentals of the Indian economy continue to be strong with healthy growth and an economy driven by domestic consumption.

In a statement, Moody's said the outlook partly reflects the inefficiency of the government and policies to address economic weakness, which led to an increase in the debt burden that is already at high levels, the rating agency said.

India's economy grew 5 percent between April and June, its weakest pace since 2013, as consumer demand and government spending slowed amid global trade friction. The government reacted strongly saying that the fundamentals of the economy are still quite strong and that a series of reforms recently undertaken would stimulate investments. India's growth outlook has deteriorated sharply this year, with a crisis that began in non-bank financial institutions that extended to retail companies, car manufacturers, home sales and heavy industries. RSN KRH HRS

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