Discussion on 'The Stable Outlook of India, Portrayed by Moody'

Ms. Radhika Thakker, student of Master of Global Business-Specializing in Investment Banking and Wealth Management, shared with us this news headline on Economic Times, scroll down to glance what our authors have to say about it.

Moody's Reiterates Stable Outlook on India's Baa3 Sovereign Rating

Ashwin Date: At the pace, things are moving on the downside, this outlook can change quickly.

Prakarsh Jain: I suppose, we should be happy in the current parlance about this one thing. At Least someone feels there is some scope left in the country. Great news. This might help in some way or the other. India has been looking in an awful state today, but certainly, some political changes would bring in the big CHANGE. Long-term outlook, as per my view, certainly POSITIVE.

Ashwin Date: I would differ from this 'out-of-the-blue' optimistic view. India has wonderfully managed to shoot itself in the foot. We have been hearing this 'long-term positive' view since a long time. However, look at the state of Indian economy. Every single day, the currency is falling by 2-2.5 Rs. !! Is this normal? No. The wisdom of the markets is supreme and the markets definitely know something. It is not just the fall in number. This will have a devastating effect on the economy. Just wait for a few months to see the impact.

Ashwin Date: This rating and all is mere sham. Moody's has just 're-iterated' its rating on India, not upgraded it. Since a long time in the past, India's rating has been Baa3 from Moody's. Still, the market forces destroyed that baseless mirror of optimism for India and have shaken the government to its core.

Prakarsh Jain: Ashwin, if we keep a cynical view, certainly, what you say is acceptable. Let’s go back to 2008 and after, India was a country, which was amongst, least affected by the Global Financial Crisis. The outlook has been great thereafter. Talking about post May 2013, when actually Indian economy has been in question. We are forgetting the global forces that are playing a role. Almost all emerging economies have been facing a heat. You might counter, by saying look at the extent to which they have affected, and the extent to which we have been. Let me use a model to answer that right away, subtract the extent of effect created by global forces and thereafter the remaining is attributable to the political situation. Therefore, I mentioned POLITICAL change in the country would bring a change.

Ashwin Date: Prakarsh, this is what Legendary Wall Street trader Jim Rogers has to say, Click Here - Economic Times

Prakarsh Jain: On close observation, we see, Mr. Rogers has mentioned the word 'GOVERNMENT' almost 15 times. Which was exactly what I pointed out in the comment earlier. Some change in that system and Indian economy would probably start reviving. I agree the roots have been completely eroded, but what I expect is, change would start building the roots again.