India Will Be One Of The
Fastest Growing Major Economies In The World: Moody’sA sign for Moody’s rating agency is displayed at the company headquarters in New York, (EMMANUEL DUNAND/AFP/GettyImages)

According to Moody's Investors Service and its Indian affiliate, ICRA, India will remain one of the fastest growing major economies globally in 2017, granting that the GDP growth will moderate in the first half of the year.

It has been also suggested by Moody's that the government will likely achieve its fiscal deficit target of 3.5 per cent of GDP for the current fiscal year ending 31 March. ICRA anticipates the country's growth of gross value added at basic prices to remain healthy in 2017, although growth will ease to about 6.6 per cent from around 7 per cent in 2016, with a likely pick-up in the second half of 2017.

ICRA anticipates a relatively healthier expansion of the organised sectors in 2017, at the cost of the unorganised sectors. The agency also stated that the loss of incomes in some sectors and delay of consumption are likely to hinder the capacity expansion plans of the private sector. However in the words of William Foster, a Moody's vice-president and senior credit officer:

Nevertheless, economic and institutional reforms already introduced and potentially forthcoming, continue to offer a reasonable expectation that India's growth will outperform that of its similarly rated peers over the medium term, and that the country will achieve further improvements in its macroeconomic and institutional profile….

Both the agencies claimed that demonetisation is likely to fortify India's institutional framework and in the future would bring efficiency gains through a greater formalisation of economic and financial activity.

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