Moody’s decision to cut its outlook on India’s sovereign rating is based in part on the government’s struggle to rein in the fiscal deficit. This is justifiable if a little behind the curve. But the ratings agency’s decision is also based on its assessment that India is unlikely to sustain real GDP growth of 8%. This is setting an extremely high bar given that only the very best performing economies at India’s stage of development have achieved this over the past few decades.
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