Nov 27 (Reuters) - Moody's said on Tuesday that the outlook
on its Baa3 rating for India is stable, in part due to the
country's high savings and investment rates, as debate rages in
Delhi over whether the country can avoid credit downgrades from
other rating agencies.
In its annual credit analysis on India, which Moody's said
does not constitute a rating action, the agency also cited the
country's large, diverse economy and strong gross domestic
product growth as supportive of the rating.
However, Moody's said: "The rating is constrained by the
credit challenges posed by India's poor social and physical
infrastructure, high government deficit and debt ratios,
recurrent inflationary pressures and an uncertain operating
Last month, Standard & Poor's warned India still faced a
one-in-three chance of a credit rating downgrade over the next
24 months, although it said a series of reform steps launched in
September had slightly improved the country's prospects.
Fitch also has a negative outlook on India.
Having faced a series of revenue-raising setbacks, the
Indian government is grappling with a widening fiscal deficit
that threatens to undermine the country's credit standing and
possibly trigger a downgrade to junk status.
Finance Minister P. Chidambaram has an ambitious target of
holding the government's fiscal deficit for 2012/13 at 5.3
percent of gross domestic product, even as sceptical private
economists forecast a deficit closer to 6 percent.
For more on India's deficit battle, see
(Reporting by Ian Chua; Editing by Kim Coghill)