Moody's cuts India's outlook to 'negative': Key highlights of the report

Moody’s Investors Service on Thursday changed its outlook on India to “negative” from “stable” amid concerns that the country’s economic growth will remain "materially lower than in the past". The outlook partly reflects government and policy ineffectiveness in addressing economic weakness, which led to an increase in debt burden from already high levels, the agency said.

Here are the salient points from Moody's report on rating action:

Moody's estimates that India's growth slowdown is in part long-lasting. Rather, the downside risks to the growth outlook have increased as prospects for economic and institutional reforms that would lift and maintain growth at high rates have diminished. The drivers of the economic deceleration are multiple and mainly domestic due to a prolonged period of weak investment, slowing private consumption, financial stress among rural households and weak job creation. On top of it, the ongoing stress among non-banking financial institutions (NBFIs), which served as major providers of retail loans in recent years, is less likely to be resolved quickly.