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Moody's Investors Service in its latest report has said the key determinant of India's fiscal strength and the credit profile will be debt affordability and projected a downward trend for the debt burden. It stated as long as nominal GDP growth holds, India's debt burden will be stable or decline slightly.

It mentioned India's fast-growing GDP, which is estimated to average 11 per cent in nominal terms, is a key driver of the projections of a downward trend in the country's debt burden.  As in the past, the key determinant of fiscal strength and the credit profile will be debt affordability and in particular the proportion of revenue absorbed by interest payments.

India has a relatively high level of general government debt, estimated at around 81.8 per cent of GDP for 2022-23, compared with the Baa-rated median of around 56 per cent. The country also has a low debt affordability, in terms of general government interest payments as a percentage of revenues, which for India is estimated at 26 per cent for 2022-23, compared with the Baa median of around 8.4 per cent. Moody's has a 'Baa3' sovereign credit rating on India, with stable outlook. Baa3 is the lowest investment grade rating.