SOCIAL STRIFEA RISK TO BUSINESS, NATION'S GROWTH

THERE has been some controversy around the recent mixed ratings for India by Moody's Investor Services. Moody's has kept a 'stable' outlook for the economy, affirming a BAA3 rating. It considers that India's economy will continue to grow rapidly by international standards, though the potential growth has come down in the past seven to 10 years.

- 

High GDP growth will contribute to rising income levels and overall economic resilience. This will support gradual fiscal consolidation and government debt stabilisation, albeit at high levels, said Moody's. However, the ratings agency warned that "the curtailment of civil society and political dissent, compounded by rising sectarian tensions, support a weaker assessment of political risk and the quality of institutions". It also flagged poverty, income inequality, lack of access to education, and tension on the borders as "social and political risks".