The landslide victory of BJP-led NDA in the elections is credit positive for India as a stable central government is expected to address the country’s economic challenges, a Moody’s report today.
“Moody’s believes that the new government’s strong mandate increases the possibility of a stable central government that will pursue a shared economic agenda to address India’s macroeconomic challenges,” said the report — ’India’s decisive election outcome is credit positive’
Moody’s assigns a ‘Baa3’ rating to India, signifying moderate credit risk, with a stable outlook.
In the recently concluded elections, the BJP-led NDA scored an overwhelming majority of 334 seats, in the 543-member Lok Sabha.
The landslide victory is credit positive for both India’s sovereign profile and corporate sector, while the effects for its banks are currently limited, it said.
The credit profiles of public sector banks, however, may experience positive effects from 2015, Moody’s Investors Service added.
It said the election results will have the immediate effect of sustaining investor sentiment, which has also recently boosted India’s equity indices and the rupee.