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August 03, 2017

India Credit Spotlight: Opportunities and Risks in the Face of Reforms

India Set To Ride Recent Reforms To Higher-Quality Growth
The fiscal year ending March 2018 has been an eventful one for India. The Narendra Modi-led National Democratic Alliance (NDA) government completed its third year of a five-year term and consolidated its political power by winning several state elections. It took several standout economic moves - chiefly the monetary experiment of demonetization and the rollout of goods and services tax (GST). The country stands tall today, with stable macroeconomic fundamentals, prudent monetary and fiscal policies, and gradual but steady reforms.


We believe a sensible approach by the government is raising the quality - although not so much the rate - of economic growth. Inflation-targeting is providing an institutional framework to rein in prices even as India modernizes its central banking. Fiscal policy has also been mildly growth-focused, even as India gradually reduces its budget deficit. Such measures have improved the country’s resilience to global shocks and lent stability to the rupee.



  • Aligning incentives to take a life-cycle approach to operating and maintaining the asset to maximize useful life;
  • Sharing or transferring risks to the private partner;
  • Reducing pressure on public budgets; and
  • Enabling innovation