International rating agency Moody's has once again slashed India's GDP growth estimate for the fiscal year 2020. The agency has lowered its GDP growth estimate from 5.8 per cent to 4.9 per cent. The agency has also lowered the country's growth rate estimate for FY 2021. Moody's has reduced it from 6.6 to 6.3 per cent.
Moody's Investor Service has said that economic reform measures such as corporate tax cuts by the Indian government, supporting farmer's income and simplifying monetary policy had limited impact on the demand side. Investors Service said on Monday that economic growth had slowed due to weak domestic consumption in India. At the same time, the agency warned that the limited growth rate would affect fiscal consolidation.
Rating agency Moody's said, "The slowdown in investment has slowed the pace of economic growth and now consumption has also come down due to financial pressure of people in rural areas and loss of employment. It is being told that GDP growth in the second quarter of July to September has fallen to 4.5 percent. This is the biggest decline in GDP growth of any single quarter in nearly 6 years. Earlier, the GDP growth rate in April to June quarter was 5%. India's GDP has been falling for 6 consecutive quarters. More recently, the market feels that the economy has touched its lows and now it will improve. Rating agencies are hopeful that the budget may make some important announcements to boost the economy. The upcoming general budget is likely to be presented on 1 February.
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