Authorities estimate growth for the fiscal year ended in March was about 6.5 percent after expansion of 9 percent the previous year. They expect it lose more traction this year, slowing to around 6 percent.
Congress has promised more fiscal stimulus but global ratings agencies say too much spending could jeopardize India’s already precarious investment grade credit rating, which is just one notch above “junk.”
The national fiscal deficit for last year was 6 percent of GDP — more than double the target — and around 11 percent if the states’ deficits are included, making it among the world’s highest.
“India faces considerable challenges in balancing the need for short-term stimulus measures” and putting its public finances in order, said James McCormack, head of Asia Sovereigns at Fitch Ratings.
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