'Narendra Modi government's fiscal policy quite prudent; improving India's quality of growth'

New Delhi: Rating agency Crisil has heaped praises on PM Narendra Modi-led government at the Centre.

The rating agency said, "Modi government's policy focus hasn’t been based on populism, or on boosting cyclical growth through fiscal and monetary stimuli, but rather on repairing the system and initiating structural reforms wherever possible.

'Modi government’s fiscal policy quite prudent'

Crisil, in a report said, “The Modi government’s fiscal policy, encouraged by low crude oil prices, has been quite prudent, and has aimed to improve the quality of spending through better targeting, and scaling up of infrastructure investment, while keeping a tab on overall deficit." 

"The monetary policy, too, has focused on ushering in a low and stable inflation regime,” the report added.

GDP to grow at 7.9%

"India's Gross Domestic Product (GDP) is likely to grow at 7.9 per cent in 2016-17 compared with 7.6 per cent in fiscal 2015-16," Crisil said.

“The swing factor this fiscal will be monsoon. There were three consecutive weather shocks -- two bad monsoons and a spell of unseasonal downpour in March 2015 which affected growth,” it said.

The report -- Choosing trend over cycle -- that evaluates the quality of growth generated by the Modi-led government, focusses on improving quality of economic growth, and the potentially disruptive impact of digitalisation. 

Positive steps for banking, electricity sectors

“Structurally positive steps have been taken such as to mend the electricity and banking sectors, but these remain work in progress," the rating agency said.

"The government has also managed to pass two key Bills -- the Insolvency and Bankruptcy Code Bill, 2016, which strives to create an enabling environment for expeditious resolution of bankruptcies with least pain to stakeholders, and the Aadhaar Bill to distribute subsidies, rural wages and pensions through an electronic platform," the report noted.