Harshly refuting Moody’s move to lowering the outlook on India's rating, Finance Ministry in a statement said that the fundamentals of Indian economy remains robust with inflation under check and bond yields low.
"India continues to offer strong prospects of growth in near and medium term," the finance ministry added.
Moody's cited increasing risks that growth in Asia's third-largest economy will remain lower than in the past for lowering its outlook. The ratings agency however retained India's foreign and local currency ratings at 'Baa2'.
India's economic growth fell to 5.0% year-on-year in the June quarter, the slowest since 2013. "While government measures to support the economy should help to reduce the depth and duration of India's growth slowdown, prolonged financial stress among rural households, weak job creation, and, more recently, a credit crunch among non-bank financial institutions have increased the probability of a more entrenched slowdown," Moody's said.