What is Moody ‘s rating?

Why in News ? Global credit rating agency Moody’s Investors Service has affirmed the Government of India’s long-term local and foreign-currency issuer ratings and the local-currency senior unsecured rating at Baa3, while retaining the short-term local-currency rating at P-3. The outlook remains stable.

Key Highlights of Moody’s Assessment:

Credit Strengths:

1. • India’s large and fast-growing economy.
   • Sound external position.
   • Stable domestic financing base to fund fiscal deficits.
   • Resilience to external shocks such as U.S. tariff hikes and global policy uncertainties.

Challenges and Weaknesses:

1. • Persistent fiscal vulnerabilities, particularly a high government debt burden.
   • Weak debt affordability, with fiscal measures to boost consumption eroding revenue base.
   • Only gradual fiscal consolidation expected, insufficient to materially strengthen debt metrics.