No India rating upgrade yet; see FY16 GDP at 5.5%: Moody's

The central bank’s move to cut repo rates by 25 basis points was not a surprise, but its timing surely was, says Atsi Sheth, senior vice president -sovereign risk group, Moody's.

In an interview to CNBC-TV18, Sheth says any hope of an Indian rating upgrade hinges on fiscal consolidation. Moody’s currently has a Baa3 rating on India with a stable outlook.

“Among other aspects, it is important to see how investment momentum pick up, what supply side policy the government puts into place and how international events pan out,” read a statement by the rating agency post the rate cut.

Sheth expects India to grow by 5 percent for FY15 and 5.5 percent for FY16 but adds that there is an upside risk to the FY16 data.