New Delhi: Congress leader Rahul Gandhi blamed the BJP-led ruling government on Tuesday about the current state of the economy by citing Moody’s rating which downgraded India’s sovereign credit rating to “Baa3” from “Baa2” on Monday and maintained a “negative” outlook.

The Congress leader took to Twitter on Tuesday to highlight the economic situation which has been further dented by the Covid-19 outbreak.

Rahul Gandhi in his tweet said, ”Moody's has rated PM Narendra Modi's handling of the economy a 'step above junk'. Lack of support to the poor & MSME sector means the worst is yet to come”.



The agency estimated India’s GDP shrinking by 4 percent, the first full fiscal contraction in more than four decades, as the country faces a prolonged period of slower growth.

The downgrade announced in a statement by the agency brings down India to the lowest investment grade of ratings. The 'Baa3' rating is the lowest investment grade and just a notch above 'junk' status. The last time the agency has downgraded India's rating was in 1998. Moody’s has mostly remained most optimistic about India compared to other rating agencies including Standard & Poor’s (S&P) and Fitch. The other two agencies have the lowest investment grade rating with a stable outlook for India at present.

The rating is critical as it highlights the government’s reform approach which has not yielded promising results and consistent decline in growth even before the Covid-19 pandemic broke. The “negative” outlook also hints at further downgrade going ahead.