BJP does not have a majority in the Rajya Sabha and such incidents may very well derail its economic agenda in the upper house where it needs support of other parties to pass legislation.
Moody's said Modi must keep his members in check or risk losing domestic and global credibilty.
Since 2004, Moody's has rated India at 'Baa3' which is the lowest investment grade.
Here are several other instances where Moody's pointed out downgradation of Indian economy.
1. Hitting out at Modi government: In June, Moody's lashed out at Modi government by flagging subdued rural economy as a 'credit negative' for India's sovereign rating.
The agency said there are growing concerns about risk of policy stagnation and 'some diappointment' was pointed out over the pace of reforms under the Modi government.
2. Banking system: Moody's had said earlier that the weak asset quality of banking system poses sovereign credit because of the banking sector's role in financial growth. It said, "In the absence of any improvement in banking-system metrics over the coming months, India's sovereign credit profile will remain constrained."
3. Moody's downgraded India's GDP growth projection: Citing a 'drier than average monsoon' Moody's revised its GDP growth projection to 7% from 7.5% in August.
The agency had maintained India's growth forecast of 7.5% for the year 2016 which was revised later.
“Our polling results pointed to some disappointment amongst the audience with regard to the pace of reform under the administration of Prime Minister Narendra Modi, and increasing concerns about the risk of policy stagnation,” Moody’s had said in June in a report titled ‘Inside India’.
4. Moody's downgraded banks: In other instances, Moody's has also downgraded banks like Bank of India, Canara Bank, to ba3 from ba2 on account of rise in NPA. It downgraded ratings for Central Bank of India and Indian Overseas Bank's local and foreign currency deposits from 'Baa3' to 'Ba1'. The reason being differentiating between public sector banks when distributing capital.
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