Moody’s thumbs down to Food Security Bill

Rating agency Moody’s has given a thumbs down to the Food Security Bill saying the measure is credit negative as it would wane government finances and make an bad impact on the macroeconomic situation.

Why did Moody’s weigh the Food Bill as credit negative?

The Food Security Bill which entitles 2/3rd of India’s population to food grain at subsidized prices, will soar government spending on food subsidies to about 1.2% of GDP per year from an estimated 0.8% currently, aggravating the government’s weak finances. The implementation of the bill will cost the government about Rs.1.30 lakh crore at current cost.

What is India’s current rating according to Moody’s?

Currently, according to Moody’s India’s rating is ‘Baa3’ with a stable outlook.  It shows medium grade with moderate credit risk.



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