While the rating agency downgraded India’s sovereign rating, BofA Securities’ economists see the present downturn as cyclical rather than structural; say fiscal stimulus is critical for recovery.
The delay in stimulus announcement is disappointing and raises the probability that a stimulus, if any, might be weaker than expected, says Jefferies India.
The amount is just 0.8% and 5.8% of India’s GDP and foreign exchange reserves, respectively. And the maturity profile is reasonably spread out in FY21.
Despite a lower tax mop-up and the shortfall in disinvestment target, government receipts are seen growing 6% in FY20, thanks to RBI’s large dividend. But FY21 would be different.
In the week ended October 4, India’s forex kitty swelled to an all-time high of $437.8 billion. In the 471 weeks from October 2010, it has crossed the $400-billion mark 81 times.
