INSUBCONTINENT EXCLUSIVE:
By Rahul SatijaInvestors are awaiting stimulus measures from the Indian government as a gloomy economic outlook adds to mounting credit
market woes and raises fears defaults will spread.
The government is planning measures to boost the economy and may announce some steps this
week to help demand for housing, automobiles, and to spur small businesses, an official said on Friday
Credit profiles of the nation’s companies worsened to a 19-month low in July, according to a Care Ratings index that tracks 1,601 local
firms.
The credit market has been stung by a yearlong shadow banking crisis that started with shock defaults last year by IL-FS group
Government measures to kick-start the economy may help investors regain confidence after other missed payments by firms including non-bank
financier Dewan Housing Finance Corp., travel planner Cox - Kings Ltd
and wind-turbine maker Suzlon Energy Ltd.
India’s central bank cut its benchmark interest rate last week for the fourth time in 2019
Reserve Bank of India also lowered its economic growth forecast for the year to March 31 to 6.9 per cent from its 7 per cent forecast in
June.
“The problem in the economy is lack of demand, which can’t be addressed by RBI’s rate cuts,” said Madan Sabnavis, chief
economist at Care Ratings
“Quality of debt in the country has definitely gone down
Indian companies will remain under pressure in the coming months,” if further measures are not taken, he said.
