The ratings on the Republic of India reflect the country's strong growth prospects, moderately deep capital market, adequate external balance sheet, and resilient economy. However, a diminishing but still high fiscal deficit and high debt burden constrain the ratings. India's economy and its financial system were resilient to the global financial crisis as well as the sharp decline in global demand. India is one of the few countries that maintained a positive economic growth rate, of 6.7%, in fiscal 2009 (year ended March 31, 2010). In addition, we expect a growth rate of about 8.1% in fiscal 2010. The gradual deregulation of the industrial sector, continued trade liberalization, a dynamic service sector, and modest improvements in infrastructure underpin this growth.
