 Do you know quite shockingly global credit rating agency Moody's investor service has downgraded India's sovereign rating to BAA-3, which is the lowest investment grade rating short of being called literally a trash category? It is unbelievable. But let's see what and why Moody's did what it did. In today's mentor talk, I will be sharing certain facts about Moody's recent low and shaky rating of India. So keep watching this video. Moody's has downgraded government of India's foreign currency and local currency long-term issuer rating and local currency senior unsecured rating to BAA-3 from BAA-2 and short-term local currency rating to P3 from P2, principally referring to challenges in the implementation of policies to minimize risks for a continued period of low growth and deteriorating fiscal position. Moody's has downgraded the ratings of major Indian companies like ONGC, HPCL, IOCL, BPCL and even TCS and Infosys to negative, as it downgraded India's sovereign rating to BAA-3 negative. Further Moody's has declared the long-term issuer ratings of reliance industries limited to negative from stable. Already, the other two main rating agencies in the world, S&P and Fitch, have rated India as low in the investment category. So now all three major rating agencies have downgraded India quite alarmingly, I would say. Moody's decision to downgrade India basically finds its basis on the inadequate implementation of economic reforms in the past couple of years, comparatively low economic growth over a prolonged period, considerable decline in the fiscal position of both central and state governments and the mounting pressure on India's financial sector. Moody's has emphasized continual fundamental challenges to a better economic growth like fragile infrastructure, rigidities in respect of labor, land and product markets and escalating financial sector risks. What bothers me most is that though this downgrade is in the context of coronavirus pandemic, but it is not driven by the impact of the pandemic. Yes, that is what has been clarified by Moody's statement. Ratings are central and built on the complete condition of the economy, the health of the economy and the state of government finances. Rating downgraded basically implies that bonds issued by the Indian government are now riskier, since weaker economic growth and deteriorating fiscal health has weakened government's capacity to pay back. Ironically, in November 2017, Moody had assigned India with BAA2 rating with a stable outlook on the premise that effective implementation of key reforms would strengthen the sovereign's credit profile. But unfortunately, the implementation of reforms has been relatively weak and has not resulted in material credit improvements indicating limited policy effectiveness. The slight face-saving and the brighter light sneaking out of Moody's projections are that though the country's real GDP may contract 4% in the fiscal year 2020 due to the shock from coronavirus pandemic and related lockdown measures, but it is going to be followed by 8.7% growth in fiscal year 2021 and closer to 6% thereafter. That's slightly promising. A prolonged period of slower growth may dampen the pace of improvements in living standards. That is the challenge our government and we the people will have to be prepared for. Well, I hope you found this video informative. See you next time at Mentor Talk with a new topic of your interest. Your choice. Thank you.