Under the Indradhanush programme announced last year, the government would infuse Rs 70,000 crore in state owned banks over four years.According to Moody’s, the budget indicates a continued commitment to gradual fiscal consolidation by bringing down fiscal deficit to three per cent over the next two years. The banks will therefore have to turn to the government for capital injection at least over the next 18 months.45 lakh crore for the four fiscal years ending March 31, 2016 to March 31 2019, their credit profiles will worsen,” he added.

However, it added that the budget is moderately credit positive for most sectors. Global rating agency Moody’s investor service on Thursday said India’s Budget 2016-2017 is credit negative for public sector banks because of the insufficient allocation of capital for the segment.“By contrast, we believe that unless the banks receive Rs 1.

The budget is credit negative for public sector banks because the government has stuck to its capital infusion roadmap ann-ounced in 2015, budgeting Rs 25,000 crore in infusi-ons,” says Srikanth Vadla-mani, a China transmission system bearings Manufacturers Moody’s vice-president and senior credit officer.The rating agency pointed out that public sector banks are unlikely to gain access to the capital markets for equity capital in the near term, given their low valuations.“However, the proposals do not contain significant measures to address structural fiscal challenges,” it said. On the issue of securitisation, Moody’s said that the development of securitisation markets in India and China will help the two countries achieve their common goal of building inclusive financial systems that will ultimately bring affordable credit to the underprivileged segments of their societies.Global rating agency Moody’s investor service on Thursday said India’s Budget 2016-2017 is credit negative for public sector banks because of the insufficient allocation of capital for the segment