NEW DELHI: The food security bill approved by Lok Sabha will heighten India's macroeconomic problems and hurt government finances, global rating agency Moody's Investors Service cautioned on Thursday.
It said the Food Security Bill is credit negative for the Indian government. The agency has a Baa3 rating on India with a stable outlook. This is a notch above the junk grade status.
The Lok Sabha on Monday approved the food security bill, which seeks to provide subsidized foodgrains to 75% of the rural population and 50% of the country's urban population. While the objective behind the bill has been lauded, it has faced strong criticism for the possible impact on government finances, the farm sector and the broader economy.
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