Moody’s returned in October 1990 to take another look at India and concluded that things had become worse. The rising external debt burden and falling foreign exchange reserves was a major worry. The rising fiscal deficit and decelerating government revenues was another. The Gulf crisis had raised fresh concerns about India’s diminishing capacity to pay for its imports. Reviewing the economic, social and political situation in India, Moody’s concluded that ‘the government does not have the capacity to achieve a rapid improvement in the government budget deficit… and India’s fractious domestic
...more
