The ratings on the Republic of India reflect our view of the country's good economic growth prospects, its moderately deep capital market, adequate external balance sheet, and resilient economy. Positive investment trends further underpin the ratings, with foreign direct investment and portfolio investments covering a large share of the current account deficit. Nevertheless, the country's weak fiscal profile and structural problems temper its strengths. Structural problems not only constrain efficiency but also preclude a large share of the population from benefiting from the country's rising prosperity. We expect the general government fiscal deficit to back-track to 8.5% of GDP in fiscal 2011 (ending March 31, 2012), from 8.3% in the previous fiscal year. Our calculations are based on our definition
