The ratings on the Republic of India are constrained by: Rising public debt and growing fiscal inflexibility. The consolidated direct debt of India's state and central governments, plus debt guaranteed by them, is projected at about 95% of GDP this year. The consolidated general government deficit, of about 10% of GDP, is one of the highest of all sovereigns rated by Standard&Poor's. The inability of India's political class, cutting across all parties, to reignite reform. Failure to liberalize land and labor markets, as well as restrictions that contain the production of various consumer goods to small-scale industries, constrain macroeconomic growth of the country. An unreformed and large public sector. Although deregulation and privatization are slowly taking places, public
